ROBERTSDALE, Alabama — Residents in the city of Robertsdale will soon be saving on electrical rates, pending the approval of a new electrical contract.
At the Robertsdale City Council meeting on …
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ROBERTSDALE, Alabama — Residents in the city of Robertsdale will soon be saving on electrical rates, pending the approval of a new electrical contract.
At the Robertsdale City Council meeting on July 5, Mayor Charles Murphy announced that the city finalized contract negotiations with the Municipal Electric Association of Georgia (MEAG). If approved, the rates would go into effect in January 2018.
The city currently contracts with the Southern Company. The contract, which was negotiated in 2012, is set to run out Dec. 31, 2017.
“Before 2012, we were in a contract with two other municipalities, Troy and Evergreen, in which we could contract over a period of five to eight years with a fixed rate,” said Mayor Charles Murphy.
But in 2012, the Southern Company announced that it would split the cities up and rates would be negotiated based on current return, causing the rates to fluctuate from year-to-year, Murphy said.
“By the end of 2015, our wholesale power rates had increased by 28 percent,” Murphy said, “and by the end of contract, we will see an increase in rates of 32 percent over that five-year period.”
Under the terms of the contract, the city had to inform the Southern Company at least two years in advance that they were looking for other sources to provide power, which was done at the end of 2015, Murphy said.
At the beginning of 2016, the city asked for price proposals and received six responses, Murphy said.
“We asked for proposals for five-year or eight-year contracts and two of the six proposals returned were for eight-year contracts. MEAG was the lowest of those two proposals,” he said.
In March, the city council authorized Murphy to negotiate the contract with the help of city attorney Ken Raines and a Washington, D.C., law firm that specializes in energy contract negotiations. The contract was finalized June 29, Murphy said.
Based in Atlanta, MEAG is a cooperative that provides electrical systems to 47 municipalities and one county-managed system in Georgia. The contract will go before a panel, which is comprised of representatives from eight municipal systems in the MEAG group. If approved, the proposal will come before the group’s monthly board meeting.
The earliest the proposal could come up for approval is Aug. 18, Murphy said. Murphy told council members at the July 5 meeting that MEAG requested that the mayor and as many council members as possible be present at the meeting.
If approved at the Aug. 18 meeting, Murphy said, the proposal would come back before the council for approval at its Sept. 5 meeting. If the proposal is not ready for approval by Aug. 18, the next MEAG Board meeting would be Sept. 15 and, if approved, could come before the council on Sept. 19.
“If for some reason it is not approved, and at this point, I believe that is unlikely,” Murphy said, “we would simply go to the next lowest bid proposal and begin the process all over again. We would still have time to get another contract in place before our current contract runs out.”
If approved, the new contract would bring the town’s wholesale electrical costs back to 2012 levels, Murphy said, and that savings would be passed on to consumers.
“This is a really huge thing for our city,” he said. “It not only provides our customers with better rates, it provides greater stability with a fixed rate over eight years; improves the system, meaning if there’s an outage, utilities crews will be able to get the power back on faster; and the system will be more reliable, meaning fewer outages for our customers.”
If approved, the eight-year contract would run from Jan. 1, 2018 to Dec. 31, 2025. The contract covers only power generation fees, not power transmission, or SEPA fees, which are fixed by federal law, Murphy said.
Meanwhile, the city is working with Stewart Engineering electrical consultants, based in Anniston, to streamline the city’s electrical system.
The council voted last July to contract for consultation and design services and to move forward with the project, which would cost the city nearly $4.5 million during the next two years.
Under the terms of the contract, the project would:
• Retain the 115 KV service point at the County Road 48 Substation, located just west of College Avenue.
• The East Substation, which is currently built to step down from 46 KV to 12 KV, will be dismantled, leaving the County Road 48 Substation as the only delivery point.
• All remaining downtown four KV distribution lines would be converted to 12 KV distribution lines at an estimated cost of $600,000.
• The city’s two four KV substations, the North Substation, located at St. Paul Street, just south of Michigan Street; and the South Substation, located on St. Paul Street, just south of Nebraska Street, would be dismantled using in-house labor.
• Several of the existing distribution lines would be upgraded at an estimated cost of $800,000.
Murphy stated that Stewart will bring finalized plans before the council for approval at its July 18 meeting. Bids on the contract should be ready for opening on Aug. 15 or Sept. 5.
In other business July 5, the council:
• Agreed to help the Robertsdale High School baseball team with lighting improvements at the baseball complex.
• Authorized a benefit Aug. 6 at Honeybee Park.
• Agreed to use one of the city’s free days at the Baldwin County Coliseum to host a free concert for the Baldwin Pops in April of 2017 and to provide a $2,000 donation to help with advertising and promotion of the event.
• Approved a request to solicit bids for construction material for a drainage project on U.S. Highway 90.
• Approved the application of a liquor license for the Central Baldwin Chamber of Commerce’s annual Flavors of the South event, which will be July 21 at the Coliseum.
• Approved 2016 budget adjustments.
• Approved a resolution supporting the Alabama Bicentennial commemoration, which will begin in 2017.
