Dover’s aging power plants spark city council’s attention

DOVER — Members of Dover City Council predicted the future of the city’s aging power plants would be one of the biggest issues they would face this year during a retreat on Jan. 6.

The large crowd that turned out at the Council Committee of the Whole meeting at City Hall on Tuesday night proved they were correct.

The crowd showed up to hear the Utility Committee’s ideas about the future of electricity in Dover.

It’s a hot topic because the city must decide if it wants to remain in the electric business by continuing to run the two power plants it owns – the McKee Run Generating Station on Buttner Place and the VanSant facility at Schutte Park.

Or, it could decide to sell its aging power plants, which have been estimated to be worth more than $200 million, and purchase electricity from a public power company.

Judy Diogo, president of the Central Delaware Chamber of Commerce, spoke before the Utility Committee on Tuesday night and asked its’ members to consider starting a task force to study Dover’s power predicament.

“We (the CDCC) are here in hopes that the city of Dover will establish a task force to see what the city can do with electricity in the future,” Ms. Diogo said.

No action was immediately taken on the CDCC’s request to form a task force.

Rather, committee members responded to the CDCC that they were in the beginning steps of what is expected to be a long and very complicated process regarding the future of electricity in Dover.

Councilman James Hutchison Sr. said it complicates matters even more now that former City Manager Scott Koenig retired on March 17 and City Planner Ann Marie Townshend is leaving for a job as city manager in Lewes. Her last day is Friday.

“The city needs to get our team in place before partnering with the CDCC on the issue of electricity,” Councilman Hutchison said.

Ms. Diogo said that electricity was a part of the CDCC’s 10-point Vision 2020 report on the future of Dover.

The report requests that Dover “Develop a plan that moves the city toward eventually selling the city’s electrical service (both generation and distribution system).

“As the sale is explored – create a trust or foundation with the proceeds that will be into (an account) which operates outside of the council. This insures those monies are not ‘raided’ by some future council. The trust can be placed with the Delaware Community Foundation as an example.”

Donna Mitchell, who was appointed by city council to the position of acting city manager in the wake of Scott Koenig’s retirement on March 17, was able to get the ball rolling on studying the future of Dover’s electricity.

Ms. Mitchell proposed what she labeled a “pro-active plan to assist the city council in future deliberations with community organizations and public discourse regarding the electric utility.”

The plan includes:

• The completion of an organizational analysis and benchmarking study by an independent consultant to include best practices and possible areas for improvement.

• An updated full cost of service study to include rate design and street lighting with recommendations on changes to the current components of the city’s electric rates.

The studies are estimated to cost $100,000.

“In order to address concerns by our customers, my proposal is to complete the organizational analysis and benchmarking study by an independent consultant to ensure the utilities’ future success,” Ms. Mitchell said.

“This would also provide accountability and transparency to our customers.”

The Utility Committee voted in favor of the studies, with Councilman David Anderson voting against them, and they will now go to a vote before city council.

There were many interested onlookers at Tuesday’s meeting, including many employees from the power plants as well as Mr. Koenig, who insisted that the city should not get out of the power business.

“The city of Dover’s municipal electric utility, at least in my opinion, is by far the best in the state,” Mr. Koenig told the committee, as an interested citizen.

“When you look at all of the issues that we have in front of us, the advantage of having generation, the advantage of the quality of the system and the advantage of the quality of personnel working for us.

“We are the best right now, and with a few more improvements, we’ll take a few more steps toward being even better than the competition.”

The dilemma for the city is should it keep spending money on keeping the power plants operational or selling them.

Consider that the electric fund contributed around $10 million to the general fund in Dover’s FY 2016/2017 budget and it becomes a difficult question.

City Council President Timothy Slavin said it might be time to take a more holistic approach towards energy at the Jan. 6 retreat.

“The time for that old model of owning our own utility may be coming to a close,” he said.

However, not before several more discussions and studies on the future of electricity in Dover take place.

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