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Wolfeboro electric rates not going up in 2012

Water meter upgrade project to be proposed next March

October 13, 2011
WOLFEBORO — Thanks to the long-term energy contract secured in 2008, which has kept the cost of purchased electricity low, it will not be necessary for Wolfeboro Municipal Electric to raise rates in 2012, selectmen learned at their Oct. 5 meeting last week.

Mayhew Seavey of PLM Electric Power Engineering, consultant to the town's Municipal Electric Department, reviewed a rate study he prepared, based on the price of purchased power under the five-year contract with Constellation Energy and the proposed operating budget for 2012.

Under the contract the average cost of purchased power will drop from 8.1 cents per kilowatt hour (kWh) to 7.8 cents per kWh. While this is good, it is less than current rates. There was a risk when the contract was negotiated in 2008 that power rates would go down instead of up, and the falling price of natural gas has driven purchased electric power rates down further than expected. Seavey pointed out that the town may want to lock in the current lower rates before the Constellation contract ends in 2013.

While the cost of power from Constellation will go down, transmission costs will go up, leading to a net average decrease in 0.6 cents per kWh in 2012.

Assuming no increase in rates and an average use of 73 million kWh by Wolfeboro users, the electric department will see a net income of $180,389 in 2012 after deducting $380,411 in debt service and $350,000 in planned capital improvements. Seavey cautioned that power use is affected by weather, but also pointed out that both the hospital and school district will be operating expanded facilities in 2012. If usage rises to 75 million kWh, the net income will rise to $263,858. If it falls to 71 million kWh, the department will still have a net income of $96,920.

Any net income generated by the electric department is added to its reserves to cover unanticipated repairs and future improvements.

If usage is up by mid-year, Seavey added, the town can review revenues and costs and consider a rate reduction at that time.

Seavey was asked where he thought current efforts to develop natural gas through "fracking" shale will lead to even lower prices for electricity. Seavey agreed there is great potential there, especially since the market would be a national one, unaffected by international demand for oil or gas. However, he cautioned at this time that there are still unknowns in terms of environmental impacts and their cost.

Repairs and meters

Municipal Electric Department Head Barry Muccio updated selectmen on the repairs needed to Substation #2 on Filterbed Road caused by vandalism. He said rock throwing had chipped two major high-voltage porcelain bushings at the station. If they fail, there would be a "flash over" electrical short and service would be lost to 1,500 customers, one-third of the total.

Muccio has tried to locate a portable substation to be used when repairs are made. PSNH had originally offered one for late September, but had to withdraw the offer due to its own internal problems. He said he is still looking for a portable but if one is not found by the middle of next week (Oct. 12), it will be necessary to shut off the power for up to eight hours while a contractor replaces the bushings.

Selectman Dave Bowers asked if the work can be done on Sunday, to avoid distrupting businesses in the affected area (Mill Street, Bay Street, Varney Road, Friend Street, and up North Main to Forest Road). Muccio replied that restaurants are usually open on Sundays and residents are at home then. He preferred a week day in case other parts or additional work are needed. The contractor will also not work at night.

Selectmen approved the outage if needed, though as Selectmen Linda Murray said "not with our blessings," provided ample advance notice is given, especially to businesses affected.

Muccio also spoke with selectmen about a proposed project to replace existing manual-read meters with wireless meters that can be read by a digital reader while driving by. Originally the meter upgrade project was proposed as a joint venture with the water department, but there are enough differences in the meters and how they need to be installed that Muccio decided to hold off on the electric meter upgrade until the water meter project is competed.

Water meter upgrade

Public Works Director Dave Ford reviewed the water meter upgrade project with selectmen. He said that he too hesitated to begin the upgrade project because the water department "may be taking on too much at one time," given its other projects. However, he found that there is a 20 percent loan forgiveness facility available for projects that lead to energy savings. The water meter project qualifies because the ability to read the meters by simply driving by will reduce gasoline consumption in meter reading while improving the accuracy of the readings. It will also be more efficient, since some meters are in awkward places and many can't be read if the owner is not present.

Ford pointed out that there are two ways to approach wireless meters: a fixed network system and a drive-by system. The fixed system is more expensive and complicated but does allow centralized meter reading. The drive-by system is cheaper and simpler. The proposal is to install a drive-by system, which can be upgraded later to a fixed system if desired.

The only problem with going ahead in 2012 was that Ford did not have complete information available when the Capital Improvement Program (CIP) Committee needed it. As a result it is not included in the current CIP plan for 2012.

Ford now has the cost, developed by consultant Weston & Sampson. The total cost would be $500,000 over the two years required to upgrade; however, by participating in the Department of Environmental Services State Revolving Fund, for which the project has been approved, 20 percent of the loan would be forgiven over the 20-year life of the loan a saving of $100,000. The loan itself carries a 2.86 percent interest cost and payments will not begin until after the project is completed, in 2015.

Because the project will pay for itself very quickly in operating cost savings, selectmen encouraged Ford to proceed with preparing a warrant article for 2012, but not before asking a few questions.

Murray asked if meter department reserve funds could be used for the project. Ford said that would not work since the 20 percent loan forgiveness benefit required a loan be taken.

A board member questioned the cost to homeowners. Ford answered that there will be no cost in most situations. If plumbing problems not related to switching meters were encountered, the cost of those repairs would be born by the water customer, whether homeowner, business or institution. Ford said the regulations on water connections need to be clarified before the project begins to make it clear what costs are covered by the department and what is the responsibility of the customer.

Other business

The board discussed two road projects as well as further options for renovating Brewster Hall: see separate articles on these topics.

Ford advised selectmen that in the course of doing an ADA upgrade to the sidewalk between the parking area and Carpenter School last summer, they discovered that roof drains from town hall are discharging into the sewer system instead of the storm drain system. The hookups will now be changed, with the cost covered by the Inflow and Infiltration project of the sewer department, which is aimed at eliminating unnecessary water inflow processing at the wastewater treatment plant.

Town Manager Dave Owen reported that a police cruiser hit a moose on Pine Hill Road last Thursday morning, Sept. 29. The moose escaped but the cruiser sustained repairable damage.

Trustees of the Pine Hill Cemetery had the required survey done by Randy Tetreault of Norway Plains Associates. Two public hearings will be needed, as well as consultation with the planning board and Conservation Commission in order for the town to accept the gift of the cemetery and its maintenance fund balance.

Highway Department crew leader Frank Riley has submitted his resignation after 14 years of service to become the manager of a working farm museum in Tamworth.

The Parks and Recreation Department has cancelled some planned bus trips to cover budget overruns in other areas.

The Budget Committee has an opening due to the resignation of Jim Eisenhower. The two candidates being considered for appointment are John Burt and Donald Faul.

Owen reported that he has not received all performance appraisals from department head by the deadline of Sept. 30 and is now "dunning" those in arrears.

In a piece of inspiring news, Owen reported that the town received a full reimbursement of $2,200 in welfare benefits from a recipient who has since improved his situation.

Selectman Chuck Storm reported that the planning board is working on a Group Homes ordinance "that will not please everyone but will make sure neighbors are notified." The board is also considering rezoning the area near the Smith River Bridge and a Wetlands Conservation Overlay District.

Selectman Chair Sarah Silk said October has been proclaimed "Safe Sharps Disposal Month." She described how dangerous the disposal of needles and diabetic prickers in trash is and how a $4 sharps clipper available at most pharmacies can safely dispose of up to 120 needles or other sharps. She also said one can use a rigid laundry detergent container for disposal, provided it is sealed and well-marked "Sharps—Do No Recycle."

The next regular meeting of the Wolfeboro Board of Selectmen will be on Wednesday, Oct. 19, at 6:30 p.m., at the Wolfeboro Public Library meeting room.

Martin Lord Osman
Salmon Press
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