Power surcharge extension proposed to complete fiber optic loop

With the city’s new transformer scheduled for use by January 2014, the City Council is considering extending the city’s power surcharge 12 more months to pay for the cost of completing the city’s fiber optic loop.
The city’s transformer cost recovery surcharge was originally passed in December 2012 to pay for the addition of a new 69 kV breaker in front of the city’s new transformer to provide protection to prevent an incident, such as the transformer explosion and fire in June 2012. The surcharge is $2.25 per 1,000 kilowatt-hours used.
The new transformer arrived at the city’s capacitor bank substation Aug. 24. The transformer is scheduled to be online with the new breaker in front of it by January 2014.
Bill Cefalu, utilities director, said the plan is to put a breaker in every substation in the city. It will cost about $250,000 to $300,000 “to make that happen,” Cefalu said. “To do that, we have to install, as we did at the steam plant, the (digital) relay system in each substation that has the breakers we have to put a fiber optic loop completely around the city.”
The council went through the first reading of the ordinance to extend the city’s transformer cost recovery surcharge another 12 months through the end of 2014. The ordinance will go through a public hearing at December’s council meeting.
The fiber optic loop will allow the two breakers at the capacitor bank substation to open up so that there is no fault and the loop stays intact. Therefore, none of the substations will lose power, Cefalu said. The loop that covers the entire city was designed so that no substations are lost when there is an interruption on the loop, he said.
However, the loop is not currently a complete loop, he said. “The 69 kV breaker at the F.A. (Federal Avenue) substation is open. The reason that it’s open is because if something hits one side of the loop, we only lose half the city (instead of losing the entire city),” Cefalu said.
The installation of the new transformer at the capacitor bank substation will allow the city to keep the old transformer online and in place where it is now at the Joseph Cefalu Sr. Steam Plant, he said.
City officials are going to add lateral sections of the loop at the capacitor bank substation. The city will start construction and install two breakers at the East Boulevard Substation next week, he said.
As an extra item, Cefalu said the city could put a breaker in front of the old transformer at the steam plant at a cost of $54,000.
The old transformer can handle about 25 megawatts and could carry the city’s power load nine months out of the year, Cefalu said. The city uses 47 megawatts at its peak usage.
“We’ve been working in the Dark Ages for a long time, and it’s mainly to try and save money and to keep the rates right,” Cefalu said. “Our rates are some of the lowest in the state.”
If everything works properly with the fiber optic loop, power reliability will go up 99 percent, Cefalu said.
One more year of the surcharge should be enough to pay for everything needed to complete the loop, Cefalu said.
The city’s power system is not reliable the way it is, and “if we don’t fix this it’ll never be reliable,” he said.
Once the new Louisiana Energy and Power Plant is built in Morgan City in 2015, the plant will be generating power at the maximum because it will put power on the grid at a lot lower cost than the Joseph Cefalu Sr. Steam Plant, he said. “It’s going to be one of the most efficient plants on the market,” Cefalu said.
When the new plant is complete, the city should never lose power again as long as the plant is running, he said. The plant will have to go down for maintenance occasionally, he said.
City officials expected to generate $380,000 from the power surcharge during 2013, which it looks like the city will do, Cefalu said. “At the time, we had budgeted that for the breaker and that installation, which was going to run probably a little less than that. But we figured we wanted to make sure we had enough money.”
Extending the power surcharge will pay for the cost of installing the necessary electronic equipment at the city’s different power substations “in the course of the fiber optic loop that we have to have to make it talk,” Cefalu said.
In other business, the council:
—Adopted the city’s 2014 budget.
—Went through a first reading of a sewer rates ordinance. In 2012, the city lost $626,000 in the sewer department, which the city had to subsidize with a solid waste tax, Mayor Frank “Boo” Grizzaffi said. “Not showing up in that $626,000 is a principal payment for a revenue bond that we had in 2011 to do a lot of rehab on our sewer. That’s an additional $217,000 that the city has to pay on top of the loss we already have,” Grizzaffi said. The city’s loss of around $500,000 per year in 2010, 2011, and 2012 in the sewer department has made it difficult to maintain the city’s sewer system, he said.
The ordinance would increase sewer rates from 47 percent of the total monthly water bill to 100 percent of the total monthly water bill for residential customers, and from 62 percent to 100 percent for business customers, Grizzaffi said.
A consultant will attend December’s council meeting to explain area sewer rates during the public hearing of the ordinance, Grizzaffi said.
—Expanded the agenda and approved applying for a $50,000 emergency government assistance grant to be split among the police, fire and water, sewer, gas departments.
—Approved the Tri City Club to use the La. 182 Bridge for its Double Trouble Bridge 5k Run/Walk on Dec. 1.
—Approved a resolution for Gulf Coast Broadband LLC to provide wireless internet access to campers using Lake End Park.
—Approved a resolution to declare surplus equipment.