$5 Million Power Plant Approved
by Melissa Bailey | December 16, 2008 6:59 AM | Permalink | Comments (11)
Before they OK’d a City Hall request to build a new power plant amid an economic crisis, aldermen added a catch.
At its Monday night meeting in City Hall, the Board of Aldermen approved authorizing $5 million in bonds to build an energy plant underneath the plaza behind City Hall. The plant would provide heating and cooling to City Hall and the Hall of Records: Click here and here for a background story with the details.
The request came as the city ends a 20-year agreement with the Chase family to buy energy from a power plant that Chase runs in the basement of the Hall of Records.
Hill Alderman Jorge Perez (pictured) has been critical of the power plant’s timing, asking why the city sought to rush a proposal through the board when it had 20 years to consider the matter. He was poised to oppose the proposal Monday night. Then he came up with a solution that would let the city move forward with its plan, while giving aldermen oversight over the project.
“I was concerned that they were going to do whatever they want without aldermanic approval,” Perez later explained.
In a last-minute amendment introduced on the aldermanic floor, he added conditions before letting the DeStefano administration have free rein over the future of the city’s energy plans.
The city is currently in negotiations with Chase Family Limited Partnership over the energy contract. The city has told Chase it will not renew the contract when it expires June 30, 2009.
City officials have said that their first choice is to work with Chase on a new contract that would let them become more partners, rather than customers, in the existing plant. The option of building a second power plant gives the city bargaining leverage and serves as a back-up plan in case negotiations don’t work out.
In his amendment, Perez set a deadline for those negotiations to take place: Jan. 31, 2009. If the city doesn’t reach an agreement with Chase by that deadline, then it can go ahead and use the $5 million in bonds to start building a new plant.
The more likely scenario, however, is that the city will need to work out something with Chase — in the very least, an extension of the current contract.
The city would need 18 months to construct a power plant, from the start of design to completion, according to a report written by the city’s energy consultant, Ed Melchiori. The timeline is significantly longer than the six months officials originally said it would take to build the plant.
That means the city will likely have to negotiate with Chase to extend its current agreement beyond June 30, 2009.
The city can use the $5 million in bonding only after first coming back to the board for approval of “the final plans and design for the construction of such energy facility,” according to Perez’s amendment.
The amendment passed by a unanimous vote.
Aldermen also unanimously voted to allow the city to issue zero-interest energy conservation bonds, which were established by a federal bailout bill. If the city qualifies to issue the bonds, it would lower the cost of the project significantly.
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Comments
Posted by: City Hall Watch | December 16, 2008 9:11 AM
Why would the energy consultant, holding hands with the city engineers try to ram this through the finance committee telling the members it would only take 6 months to build? And telling them "it will be tight" but is doable, even when they knew the earliest the bonds would be sold is March 09? It's now going to take three times as long as originally projected. Are they sure they know what they are doing?
Posted by: Streever | December 16, 2008 11:23 AM
I hate to dwell on the past or assign blame, but I do think it's worth noting that we've had 20 years to work on this.
If the best we can do is a clearly rushed proposal (18 mo vs 6 mo) to build a $5 million dollar device which mimics the functions of another device sitting next to it, I'm a bit surprised.
We really can't extend our contract while we work out a better fix? This is clearly not thought out or well considered, if we were claiming it would take 6 months a mere 2 weeks ago & we've now tripled that.
I'm glad that Perez spoke up, and hope that we can come to a reasonable negotiation with Chase.
I question if such a hasty proposal will do it's job properly, & if it will really cost "only" $5 million. Is it conceivable that we may have commited an error there, too?
Posted by: Mr. Mike | December 16, 2008 2:46 PM
Considering that United Illuminating left 40% of the city without power for a couple of hours, wouldn't it be wiser to have an plant that could support more than TWO buildings.
WAIT, WAIT rush is just Business as Usual for this administration.
Isn't it time for a Change?
My sister says she wants for George again for President. I thought she was talking about GWB and that she was crazy.
Now I get that it's Jorge she wants for Mayor and it she can't have that she wants him heading the BOA.
Posted by: Disgruntled Democrat | December 16, 2008 3:24 PM
First, who in their right mind would buy a bond backed by either the City of New Haven or the US government?
Second, what entity is going to supply the power to City offices once this contract runs out and at what cost? I am sure that this is not included in the $5mm budget. The temporary power mentioned in the last article will need to have security, and is probably half as efficient as the Chase equipment.
Also, if the $5mm budget is for a six month project, what is the cost for an 18 month project, $15mm?
If the Board of Aldermen was working in our best interests, and wanted to attempt to be a checks and balances for City Hall mismanagement, they should have vetoed this request or made some form of penalties for cost overruns, etc. Maybe for each percent the project goes over budget they remove one percent of King John's wages. I would love to call him a Jester, but the only fools are the ones who keep re-electing him.
Posted by: Bruce | December 16, 2008 3:31 PM
Mr. Mike: I think this plant is only providing heat and cooling energy, not electricity.
Posted by: cedarhillresident
| December 16, 2008 5:30 PM
bruce is right mr mike. it is an hvac plant. What a joke. Amywho I agree with your sister Mike
Posted by: ignoranceisbliss | December 16, 2008 6:02 PM
The system will provide heating and cooling. It will have a useful life in excess of 20 years. The ordinance before the Aldermen provided the Administration with the immediate authority to issue bonds and build the new system. The City needs leverage to negotiate with Chase. If Chase doesn't offer reasonable terms, the City will have an alternative. Don't wet your pants....Alderman Perez simply delayed the issuance of the bonds (counting the holidays) for approximately 30 days until January 31.
Posted by: Disgruntled Democrat | December 16, 2008 7:26 PM
I wrote incorrectly before, referring to it as power, but nevertheless, this should have been done 2 years ago, and not at the last minute. I can't wait to see the actual true cost, if it ever surfaces. We all pay for his mismanagement. JDS refers to a possible bailout like he deserves one because he is as inept as the GM CEO, except we've got a snowball's chance to get one.
Posted by: Politics as Usual | December 16, 2008 8:50 PM
This issue has been a disaster from day one. The administration staff left things too late. Exactly who is anyones guess. Then Perez gets control of the money so work cant start till January. That gives 5 months to complete before the end of the Chase contract. Then he drops the nuclear bomb by telling all the power plant will take 18 months to build. All the citys cards are now on the table. Chase knows the city will need there power for over a year after the contract finishes. Guess what. Chase will now charge the city for the years power supply what they would save by building there own. Result. The city saves nothing. We all get screwed by Chase. Who wins. Perez by making the administration look stupid. Sorry, but I think Perez is the fool by giving the game away to Chase. I hope he never runs for mayor as he will be as bad as DeStefano.
Posted by: tmj | December 18, 2008 8:25 AM
JORGE PEREZ FOR MAYOR....START A COMMITTEE
Posted by: cedarhillresident
| December 18, 2008 10:19 AM
tmj
He has not said he was interested in it. Belive me people are waiting for someone to put thier hat in and now that the may is talking about an millrate increase on top of the phase in increase WE NEED SOMEONE TO RUN! Looney, Perez, Dyson or anyone else that is qualified (key word qualified!) could win by a landslide if we get a mill rate increase!
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