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November 5, 2008

Bright days ahead as VMEU plan OK'd

By KRISTI FUNDERBURK
Staff Writer

VINELAND --Voters approved the Vineland Municipal Electric Utility's question Tuesday by a 2-to-1 margin. The voters' support gives utility officials the go-ahead to build a new generating unit.

The nearly four-year project goes toward securing the city's energy independence, VMEU officials have said.

"The City of Vineland Electric Utility would like to thank the citizens of Vineland for their support," said VMEU Assistant General Manager Harry Maloney.

More than 8,600 voted yes on the ballot question.

VMEU Director Joseph Isabella said, "We're very happy and honored the people of Vineland gave us this confidence. Now we're going to get the unit installed and minimize rates as much as we can."

Maloney said the process won't be immediate, but utility officials will work on a busy schedule so the unit will be operational at the H.M. Down station on North West Avenue by June 2012.

Utility officials will proceed working on the engineering design of the unit with the assistance of an outside engineering firm, and submit site drawings to the city Planning Board, he said.

Applications for state air permits will take place in the spring.

A public bid document will be prepared by June 1 and utility officials plan to make an award in early fall 2009, he said.

Utility officials will introduce a bond ordinance to purchase a $60 million investment in the generator for Mayor Robert Romano and City Council to review and approve.

City financial officials will determine at that point the best time to issue municipal bonds, Maloney said.

Once the generator is built, the VMEU could consider replacing existing aging units.
The utility’s plan will not directly result in higher electric rates for city residents. Money ratepayers have paid through the utility’s wholesale electricity distributor will instead cover the debt incurred for the new generating unit, Maloney said.

That means the roughly $6 million in yearly ratepayer money used to purchase power from third-party suppliers will instead be used to repay investor money borrowed to buy and build the new generator, he said.

“What we’re paying PJM will be rolled over to pay the debt,” Maloney said.

PJM Interconnect is a wholesale electric distributor that operates a massive distribution grid along the Northeast corridor. Utilities purchase power through other generators, and that power is then distributed along PJM’s grid.

The VMEU — the state’s only municipally run electric generating utility — is facing a capacity shortage and transmission congestion.

VMEU Director Joseph Isabella has said the utility needed the new generator so the VMEU can make power during critical periods of the day, when purchases costs are at their highest.

The opportunity would eliminate the utility’s expenses to PJM at peak hours and transfers costs over to paying debt on the generator, which could insulate the utility and its ratepayers from swings in the energy market and secure the VMEU’s independence, utility officials said.

The new generator will allow the utility to use natural gas as an alternative fuel, allowing the electric utility to transition away from older, inefficient and coal-based systems, officials said.

Of the voters’ decision, “I think they’ll be pleased with the results in their electric bills in the long run,” Romano said.