Tag Archives: cost

02.12.26
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The Transmission Delay Has Been Costly

Since the pause the City has spent hundreds of thousands of dollars on reviews by consultants, all of whom failed to identify a better alternative, and all of whom one way or another confirmed the need and the route. Yet Council previously has been unwilling or unable to put construction of the line back on track.  It now has another opportunity to do the right thing, and allow the construction of the line along the Nifong/Vawter School Road to move forward.

The delay has been costly to the public, and further delay will only cost us more. In addition to the consulting costs, we lost millions in sunk costs. We incurred significant costs associated with work to strengthen various points in the system some of which may not have been necessary had the line been built. And in the interim, the costs of construction have also increased. Although it is hard to quantify all of the additional costs incurred, some can be clearly captured. These include:

Sunk costs lost due to “pause”:$4,400,000
Ameren Study$    10,000
Quanta Study$    97,500
Burns & McDonnell Study *$   95,000
Siemens Study$  358,000
Black & Veatch 2025 estimates $  133,650
Increased costs of construction (line only)**$12,108,934
Total for this subset of the costs of delay$17,203,084

The pause has also raised our risk, and eroded the reliability of the system. You can read more about that in the next post.

The Nifong/Vawter School route is not only the best route from an engineering perspective, it is estimated to cost $10,592,899 less than the alternate Chapel Hill route also being considered by Council. And that is only taking into account the costs of the transmission line itself. When the costs of moving and building associated distribution is taken into account, the Nifong/Vawter School route is $21,163,959 less than the alternate route.

Let’s stop wasting our money. Build the transmission line on the Nifong/Vawter School route.

*Note that neither the Quanta nor the Burns and McDonnell studies, both of which affirmed the need for the line, were discussed by the Council at a public meeting despite the fact that public presentation to the Council was part of each contract.

** This is the difference between the current Black & Veatch estimate for the Nifong/Vawter School route of $30,108,934 and the original cost of $18,000,000 at the time bonds were issued.

10.23.21
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Yes, New Transmission Infrastructure IS Needed


The most recent consultant hired by the City, Siemens, has once again affirmed what has been reported on this blog over the last few years – new investment in our transmission and distribution infrastructure is overdue. Substations are overloaded, there are feeder lines that have no adequate back-up at times of system peak, and certain neighborhoods, as well as our wastewater processing facilities, lack back-up in the event of an outage (See e.g., pp. 17-20, 53-54, 56, 60, 77, 130, 107, 114-120, 130, 154, 175-176, 183, 186, 190).

Water & Light told us that new investment was needed back in 2013 when it first proposed the new transmission line known as Option A and the Mill Creek substation. But after that line was approved by voters, bonds issued and work begun, the City Council “paused” that work, without an alternate plan in place. In the almost five years since that pause was put in place, the risks of service interruptions and outages has steadily increased. During that same period, we have spent over $500,000 in consulting fees* to confirm what Water &  Light told us, and what politicians denied. New investment is now urgently needed.

The Siemens plan, which was prepared for the council-appointed Integrated Electric Resource Master Plan Task Force, confirms the urgent need for new investment. And it reviews numerous options for that investment — new lines, new transformers, battery storage, etc. However, it avoids any straightforward comparison with the paused option. Despite the lack of that comparison, it does appear that we will pay more for these options than we would have paid had we completed the paused line.

How much more will we pay? We may never know. That question simply wasn’t asked by the Integrated Electric Resource Master Plan Task Force that commissioned the report. And what might be the best way to engineer our system for safety and reliability, and provide the highest value to those of us who pay for service? The Task Force didn’t ask that either.

If you agree that politicians should be accountable, and that the costs of their decisions should be clearly documented for the public, you can provide feedback to the Task Force at: online comment form.

*(Quanta – $97,500, Burns & McDonnell – $95,000, and Siemens $358,000).

11.19.19
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Transparency, Electric Service, And Focus

Municipal utilities exist to provide reliable service to city residents at affordable rates.     A Staff memo presented to the City Council on November 4, 2019 supported a 20-year contract at $4.5 million a year for a “utility scale” solar generation resource.  Part of the rationale was that this contract could help the City meet the greenhouse gas emission reduction targets in the climate change plan that the City Council recently decided to adopt.  The City would plan to resell most of the energy it obtains under the contract in the wholesale market to offset its cost.  Here is the specific language in the Staff memo:

Our current renewable rate impact methodology is an incremental cost impact model which works with the assumption that renewable generation provides needed capacity, does not exceed current load and can be absorbed by the existing dispatchable resources. When the level of renewable resources has the potential to operate outside of these assumptions, additional impact assessments should be considered.  It is important to know that at some point we would be producing more energy relative to our load, depending upon the reconciliation interval considered (i.e. hourly, daily or monthly). As renewable resources are added we will reach a point where the energy produced from our resources exceeds Columbia’s load.  This excess generated energy will be settled directly in the MISO energy market.

In other words, we will be buying more power than we need for providing electric service to users in Columbia. This appears to be a shift away from a focus on what is needed to provide electric service. The Water and Light Advisory Board is also considering how to advance climate change goals in the integrated resource plan for the electric utility by procuring renewable resources, and it is not clear that they are giving equal consideration to more traditional approaches.

The purchase of renewable resources to meet goals other than the provision of service can be very costly for those who pay the rates for utility service, as this cautionary story shows. Citizens deserve clear and easily accessible information on the options being considered. Only when all appropriate options, including purchased power and other traditional resources are evaluated for cost and reliability and risk can we properly weight the trade-offs and decide what best meets the need for efficient, reliable and cost-effective electric service. We are not getting this kind of information.

Ask questions and be vigilant. It’s your utility and you pay the costs.