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.
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?