Because of the widespread interest in the proposal for nuclear energy being considered by MLGW, as demonstrated in the dozens of comments on our post about this subject, we’re posting the transcript of the October 9, 2018, City Council Committee meeting. Audio is available at http://memphis.granicus.com/MediaPlayer.php?view_id=6&clip_id=6865
Council member Brown: here
Council member Colvett: here
Councilman Morgan: here
Councilman Jones: here
Councilwoman Fullilove: here
Councilwoman Swearegen: present
Chairperson Robinson: present
Robinson: We only have one item on the agenda today. It’s the discussion of an alternative power source. We will have an introduction by the chairman of the County Commission. Mr. Van Turner…so is he still in the room? Laughter
Robinson: “He’s not here…so our speaker today will be Bill McCollum. The topic will be the Bellemont Nuclear Plant. Mr. McCoullum. Did I say Bellemont or Bellefonte? I’m sorry, its Bellefonte. Will you please state your name and address for our records?
Bill McCollum-My name is Bill McCollum. My address is 14…. Trail….North Carolina.
Robinson: Thank you. You may speak.
McCollum: Thank you. my name is Bill McCollum….I haven’t met you folks before…by way of introduction…..I worked in the public utility my whole adult life. Engineer by training…spent about 32 years with Duke Energy working mostly with nuclear generation but also with transmission integration…more recently I was. Councilperson…”Wait just a second…chair…we need to get a drop mic or something because I’m not hearing you clearly here sir.
Robinson: Mic is in the ceiling. We just need you to speak up/
McCollum: Would it be okay if I stood up?
McCollum: hopefully that will help a little bit. So as I said, my background. I spent my life in the electric utility business working in nuclear generation. I was in charge at one time for the start up and operation of a nuclear power plant in south Carolina. And then more recently, I was chief operating officer of the Tennessee Valley Authority and was responsible for generation, transmission and power marketing functions for TVA as well as river operations. So what that means is that I’m’ an old utility guy and as an engineer what I’ve spent my life doing is’ figuring out how to solve problems. So what I’d like to talk to you today about is a problem and a solution.
So MLGW has announced a plan to raise rates significantly for Memphis citizens in order to pay for infrastructure improvements. So, because of recent storm incidents and outages. I think everyone in Memphis understands that the infrastructure needs work But what I want to talk to you about today is a better way to improve the infrastructure and help the citizens of Memphis rather than just raising utility rates and saddling the customers with higher bills.
So let me get to the bottom line before I say everything else I’m going to say. I’m here to urge you folks not to approve a rate increase for MLGW because I believe there’s another option that will allow MLGW to address the infrastructure issues without burderning the citizens of Memphis with higher bills.
So, how would that work? Since January we’ve been talking with MLGW about a proposal to supply low cost power from the Bellefonte Nuclear Plant. I’ll talk a little more about Bellefonte in a minute. But the gist of this is that we have made proposal to supply MLGW with power significantly below the cost of what they’re paying TVA today. Initially, MLGW provided us with a letter of intent stating that they were interested in this. And we’ve been moving forward on that basis since then.
Now this was back in February…first discussions. So we suggested begin with our first discussions with MLGW management that they would I sure want to get studies of their own to validate the proposal that we make. That’s been discussed several times since then. I know more recently MLGw proposed to a study of power supply options.
We’ve asked for an updated non binding letter…I want to emphasize non binding letter of intent. We’ve not asked MLGW to make any binding commitments thus far. We’ve asked for an updated non binding letter of intent from MLGW to keep this option alive. But MLGW has not been been willing to provide us one and stated their interest in studying options. And studying options is fine.
But at the request of the US Dept of Energy as part of looking over and reviewing our loan application to DPE. They asked us to do an independent study. So we engaged a nationally recognized firm. And its another one of these three letter firms. There name is ICF. So we engaged ICF, a nationally recognized firm in the energy business to perform a study and we paid $250,000 for an independent study. So that they would evaluate the feasibility of our proposal to provide power supply from Bellefonte to MLGW, or to Memphis. They completed their study and this study by a premier firm in the industry. This study concluded that Memphis could save $487 million a year off of what they’re currently paying TVA for electricity.
The savings would not begin to flow for five years when Bellefonte’s completed and put into operation. But as we’ve discussed with members of the MLGW Board and other folks in Memphis it’s easily recognizable with that projected stream of savings, those savings would support financing upfront to obtain money so that MLGW could begin the infrastructure improvements right away.
And nuclear development would be happy once we have signed power purchase agreement to arrange the financing so that you could get the money upfront, begin the infrastructure improvements without waiting for Bellefonte to go into operations. Or it could be done other ways. The key is there’s a stream of savings, hundreds of millions of dollars of savings that would support fixing the infrastructure without raising rates.
In fact you could fix the infrastructure and lower rates. Once the deal is singed we’d be happy to work on the financing and this could all be done without rate increases.
Now in the ICF report. There are lot of other details that addresses the ability to transmit the power physically from Bellefonte which is located near Scotsborough Alabama to Memphis. The bottom line is very clear. I’m not going to go through all the details of the report. There’s not time. It would put you all to sleep. The bottom line of the report is…this is a viable option that would allow MLGW to save money on their power costs. Right now MLGW pays about a billion dollars a year, with a B for the power that they buy from the Tennessee Valley Authority. With this proposal, almost half of that money will stay here in Memphis.
So, I’m back up and talk about the Bellefonte. Bellefonte is a two nuclear plant that TVA had built near Scottsborough Alabama. TVA decided to mothball the nearly finished plant. Unit one, it’s a two unit plant, referred to unit one and unit two. Unit one at the time TVA stopped construction was about 93 to 95 percent complete.
Actually had nuclear fuel on site ready to load into the reactor and begin to start up. TVA decided to back away from the plant at that time. And kept it in a mothball condition. With the system and the equipment being meticulously maintained over a period of years to keep the condition of the plant good. And to keep it up to the standards required by nuclear regulatory commission. Then in 2016, TVA decided to sell Bellfonte plant at auction sighting that they no longer needed the power from Bellefonte and that they didn’t believe it was cost effective.
Nuclear Development purchased the Bellefonte plant from TVA at auction and now we have plans and schedules in place to complete unit 1. Fully upgraded in accordance to modern day standards and be able to complete in five years and be able to supply power. We’ve selected a worldwide construction firm in the nuclear industry…SNC Lavelin to be the lead constructor to finish the plant. They’ve had people on site all this year going over the plant. Validating the plans and drawings for construction.
So, why would you pick Memphis for something like this? Well, there’s several reasons. It just so happens that Memphis is one of the few cities within TVA that has a five year notice period in their contract between MLGW and TVA. Many of the distributors have 10 year notices. We’ve talked with several folks who would be very interested in buying power from Bellefonte but they would have to wait the 10 years before they could get on board.
Memphis has a five year notice period and also an added advantage that the contract requires TVA to give 10 year notice. Giving Memphis an advantage that you can give notice for a shorter period. TVA has to wait for 10 years. Geographically Memphis is in an ideal position because you sit right on the western edge of the TVA power grid. And right across the river from the largest transmission service providing network, the Midwest independent service operator network, MISO, in the country. So that gives Memphis the opportunity to hook up across the river to MISO should you want to leave TVA or TVA not want to supply the additional power you would need beyond what Bellefonte would produce.
So it gives Memphis two fully capable options to provide safe, cost effective innovative delivery of electric power throughout your system. MISO could meet all of Memphis need for backup power for the remaining energy needs beyond Bellefonte and for all the transmission and reliability services they currently get from TVA.
A third reason Memphis is an ideal selection is the size of Memphis. So there are a lot of distributors and a lot of power users in the region who are fairly small. Much smaller than Memphis. Memphis is of a size and a load that you could use all of the power from one of the two Bellefonte units. So it make a great fit and it means that we only have to make arrangements and set up the logistics for one unit to one customer. So you can kind of think of it if you are selling a commodity around town then you could load up your truck and make one delivery. You don’t have very much transportation costs. But if you have to make a hundred trips around town to individual customers then your costs go up significantly. So the size makes it a great fit as well.
To finance the renovation and upgrades to the Bellefonte unit, we’ve applied for an $8.6 billion loan from the Department of Energy under the 2005 policy act loan guarantee program. That’s a two phase review process. We’ve gone through phase one. We’re at the end of phase two. We’ve provided everything that the dept of energy has asked us with one exception and that’s an updated letter of intent from MLGW saying that you’re interested in pursuing this option and continuing discussions. Without this we can’t secure the financial commitment to keep this option alive.
So what risks are we asking MLGW to take to look at this option. We are not asking MLGW to take on any risk regarding the completion of Bellefonte. The developers bear the full risk. If we agree to a power supply contract with MLGW would only obligate MLGW to buy power once it’s produced at a rate specified in the contract that would be fixed for the duration of the contract except for changes over the years in operating expense. This would be a rate that would be $39 a mega watt hour as opposed to roughly $75 a mega watt hour that MLGW pays TVA today. If we fail to complete Bellefonte MLGW doesn’t pay a dime.
There’s no upfront expenditures or money commitments being asked for. It’s just to pay for the power when it’s produced when Bellefonte’s in operation. MLGW doesn’t have to take on any risk of power supply or reliability because there’s plenty of power and reliability services from either the TVA network, which is where it comes from today, or MISO across the river. So you have optionality in two directions.
So how does this happen. To make this happen is for MLGW to be willing to make a change regarding how it gets in energy. As many people do today. It is very unusual in government, in any part of government, for people to buy goods and services from a sole source supplier with no competitive bidding. MLGW has been in a sole source relationship with TVA for a long, long time and we think it just makes sense to look at options and to look at competition. We want to have discussions and we’re willing to have discussions any time with MLGW administration to discuss an updated letter of intent to talking about negotiating the terms of a power purchase agreement.
We think that the Bellefonte proposal offers a viable option for MLGW to save the citizens of Memphis hundreds, of millions of dollars a year for 30 years and avoid the rate increases that are being proposed. The proposal could lower the cost of power for business customers making Memphis more attractive business location and for residential customers. Lowering the bills for people who are already having a hard time paying utility bills.
So in conclusion, I would just ask you please, while this option is on the table, do not allow MLGW to raise rates when other viable options are here that should be discussed. MLGW has indicated an interest in exploring options, but exploring options doesn’t require raising rates. There’s plenty of opportunity to look hard at what the options are out there and frankly if MLGW can find another option that saves more than $487 million a year, more power to them. Thank you for your time.
Robinson: Council members do you have any questions?
Bill did you….show video of plant?
McCollum: Yeah, if we have time to do that.
Shows news clips.
Fullilove: Sir, glad you’re here. Umm…how many…you say Memphis light gas and water can save how much a year?
McCollum: $487 million. The levelized savings of the 30 year term of the contract according to the study we had from ICF it would be $487 million per year
Fullilove: Each year? You say each year we could save $400 and something thousand dollars a year. Million dollars a year? So, okay, let me ask you this, is anybody from light, gas and water, are they paying attention to you?McCollum: Well, as I say, we’ve been having discussions since the first week in February and frankly things have not moved along… hoping we could have more discussions.
Fullilove: I can’t hear you sir.
McCollum : I’m sorry. I said we ‘ve been having discussions with folks at MLGW since the first week in February. I would have hoped those discussions would have moved along faster than they have . I don’t know….how much attention.
Fullilove: ok. Tell me, tell me what is the bigger issue here, with light gas and water. I mean, what is it? With TVA, what is it?
McCollum: Ma’am I don’t know what the issue is. We’ve made a proposal with a lot of back up information that says you can save a $487 million a year. Beyond that I’m really sure what the issue is.
Fullilove: you can…you can say that to us.
McCollum: so right now MLGW pays about a billion dollars to TVA. Instead of paying a billion dollars, what the study shows is that you pay about half of that. And so, that’s where the savings come in.
Council person: same level of service, same power, same everything?
Robinson: Let’s allow the president of MLGW and make a statement. Mr. Young.
Young: Ok. Thank you. I will be respectful of your time, so I don’t have time to rebut or challenge the notions that Mr. McCollum brought…I do appreciate him sharing what he did. There are a number of reasons that we are where we are today. It woujld really take me longer than you have, but overall let me just say this. We are responsible for delivering customer value and customer service in Memphis. MLGW has been here for about 80 years and we have that responsibility going forward. We will be the ones who will have to make sure that our customers needs are served going forward and so as we evaluate any option. We keep that at the forefront of our minds. I will tell you we are extremely concerned anytime, about our customers and what they pay.
We want to make sure that our customers’ rates, which today, as you may know, are the lowest in the valley, among the lowest in the country, about a 30% lower than where I came from and, um, we actually have a very good position today, when it comes from what our customers pay as a rate.
But on the other side of the option of what you’ve been told, what you’ve been presented today, there are a number of concerns we have. We do take on an additional risk that Mr. McCollum did not mention if we were to pursue this option. It is our concern before we engage.
He mentioned a letter of interest that was signed a few weeks before I came. That letter that was signed, has not been revoked or rescinded. The reason we have not signed an additional letter because the letter that we were sent was actually a different letter than was originally signed. It did include something that would bind MLGW and I’ll give you an example. In the event we provide notice to TVA that we are looking at disconnecting, if you will from the source. That begins a clock, right. So our signing a commitment either a letter or a ppa a power purchase agreement basically puts them on notice.
The risk associated with that, because we will not know, once we do that what happens in the event that this particular plant is not completed. A plant, which by the way, 35 years ago I worked at. That is where I started my career, so I’m familiar with the Bellefonte plant.
That plant was begun in the 70s. That plant is sitting there about 45 years old . So our concern again is around sustainability. We have questions around the savings and the way they are calculated. We’re not going to dispute all that today. But I will tell you that is one of the reasons we’re doing a different study.
Our study also includes, because, what Mr. McCollum presented makes a huge presumption. That huge presumption is that it is a viable option to complete Bellefonte. If you look around the industry today and read about the nuclear industry you will know that is a an incredibly large presumption. In the event that facility is not completed, we are concerned about making sure we can continue to provide reliable service to our customers. That is a very, very big risk and concern for us.
So, one of the things that we’re thinking about, even to go to a back up source because as you may know the Bellefonte plant does not meet the entire needs of our citizens, of our customers. We would have to, if we couldn’t get back up power from TVA, we would have to connect to another source. He mentioned MISO across the river. Well the cost to do that would have to be born by our customers. We would have to build transmission, acquire right a way, there are a number of steps that need to be taken.
In addition, one other thing I’ll mention is that while we do have a full requirements contract with TVA, I need everyone to understand that on an annual basis since about 2010 or 11 the net price that our customers have paid as a result of the output, as a result of the power we have purchased has really had minimal change and that’s because while there has been rate increases from TVA there have been offsets in fuel that have caused the customers rates to be relatively stable.
So trust us when we say that we are concerned about what our customers price is. I would caution anybody not just when it comes to energy, I would caution anybody to be very, very careful and thoughtful about any deal that’s presented to you that tells you that if you already have the lowest prices in the land we can save you half of that and there’ll be no harm no foul everything looks great going forward. We’re being very careful about that.
Our due diligence is not yet complete. But we are completing our due diligence which includes the nuclear development option. We are not ignoring that. We’re actually looking at that as well. I guess my point is… there are a number of things we can also discuss. I just want you to be aware that while we have been in negotiations or discussions I should say with Nuclear Development since the beginning of this year. I came into this , of course it was presented to me when I got here. I must be comfortable with the deal that is presented. It is an incredibly big decision that I don’t take lightly. If I’m going to be responsible for that decision that I’m going to do my due diligence before I enter into any agreement that binds us which this ultimately would do to some unknowns which we are not yet comfortable with until we complete our due diligence.
Robinson: Thank you Mr. Young. Councilwoman Fullilove do you have any other questions?
Fullilove: No, I do not.
Conrad: Can we get some extra time. Councilman Colvett only has one item, and Chairman Boyd . I have a couple of questions for both y’all. So, you’ve had this since January.
Young: I didn’t get here until March. My predecessor signed the letter of interest.
Conrad: Which is non binding? Young: Yes.
Conrad: So that doesn’t set anything off with TVA?
Conrad: You’re seeking another, to have that updated by the new leadership, is that
McCollum: So over the course of time, let me explain something, as I said this has been going on since the first of February and time has marched on through a number of iterations so over that period of time we presented two or three different proposals for an updated letter attempt. Some of them have different statements. Some of them were the same as signed by Jerry Collins….so we’re open to any sort of letter of intent. The one that was signed in February. An updated one that explains more if that’s to MLGW’s liking . you know, we’re open to that. We presented several version because we thought by submitting different version maybe it would help with the discussion going.
Conrad: I guess one of the frustrations is that we’re hearing from somebody else, hey we’re being evaluated by MLGW.
Young: Well, just to be clear, let me sort of speak to something that was mentioned. I’ve only seen one version of a letter of interest that include something, a sentence that was binding for us, so I’ve not seen several. So, just know that you all have seen, that we have talked about that fact we were talking about considering options. I actually made a comment several weeks ago that we were looking at options for power supply.
Conrad (?) Do you know about this November deadline?
Young: I’ve heard about that. But I don’t know that, and again, just so you all know where I come from, my sense has been while this is extremely important, we must do what we need to do to make sure that it is right for our customers . So we’re not going to let someone else’s urgencies be ours.
Conrad: Understood. Regarding LOI. What happens if you get a non binding LOI? Sure, then you get, a $9 billion loan?
McCollum: The way the process works is the last information request from the Dept of Energy in terms of processing our loan. Had a number of requests. One of those for an updated letter of intent. We’ve supplied everything else the DOE has asked for. If we were able to fill that hole then that would move us to a conditional commitment. Once the Dept of Energy makes a conditional commitment then the money is…up. Which means the funds that are currently available under the energy policy of 2005 would be committed and that would protect those funds from Congress, somebody coming in and saying let’s just do away with that program.
Conrad: So a non binding letter of intent let’s you do that. What happens if you guys for what ever reason, well why was this plant abandoned many years ago?
McCollum: So TVA reached a point in time where Bellefonte unit one was essentially complete and Watt’s bar in Tennessee was coming along and was essential and complete. They were the two plants where construction was neck and neck . And TVA decided at that time that they didn’t need all the power from those plants and they made a decision to go with Watts bar unit 1 rather than Bellefonte . they put Bellefonte in….status.
Conrad: What happens if say we do this and for whatever reason you guys do not complete the process and then we’ve already committed?
McCollum: Again, there’s other options other than TVA. I would also say if you look historically.
Conrad: But You’re trying to get us to do this with you guys?
McCollum: I’m talking about all the power outside of Bellefonte. As Mr. Young said we never said Bellefonte will supply everything MLGW needs. So you need another source of power. That could be TVA , that could be MISO, that could be other sources.
Conrad: If it didn’t happen for some whatever other reason, we’ve obviously done something different we’ve done for ever to do something with you on nuclear power, what would that look like?
McCollum: What it would look like if you were getting your power supply and reliability services from MISO, their rates for the last several years have been lower than TVA’s power.
Conrad: I guess you’re proposing the city do something with you. I would think there would be some massive penalties if you guys didn’t deliver. That’s my only point on that. What about, Mr. Young mentioned transmission costs….could you just respond to that?
McCollum: yes. So the cost of transmission lines to connect to MISO and interconnection fees and MISO membership fees were all taken into account in the ICF study so the savings that I discussed were the net of all those additional costs.
Young: Just one quick point on that. To construct those, again assumptions are built into that assumes we can get the routing, we can actually get that done. Again, that is something we have to be comfortable that can actually happen as well.
Conrad: So you have to verify…so if you don’t do something with us by mid-November what happens, in a month basically?
McCollum: Well, we’re going to negotiate with other potential customers, but there’s the potential that the loan guarantee program goes away. There’s been people who have tried to cut those funds. They were cut from the budget this year. They were put back in at the last minute. So those funds could go away if we don’t have a loan agreement by mid-November.
Conrad: I guess you could sell the power to somebody else, and they get the…. savings? What is your timeline Mr. Young?
Young: Well the study that is underway now, that is being conducted needs to be completed in total in December. We should be getting some preliminary information probably in the next four to six weeks that will help us along the way . Once we get that, we would like to review it of course. Like I said, it includes the nuclear development option so it’s not just that option. It includes that plus several others.
Conrad: What others would there be?
Young: I don’t know. I’m assuming MISO. We basically have asked them to evaluate options available to us so that we can make a good decision going forward. I think it’s important for everybody to understand, everybody to be clear that the information that we talked about in regards to upgrades we need to do is internal to our system.
To modernize our infrastructure is actually separate from the reliability we’ve been receiving under our total supply contract with TVA. We’ve had a very reliable source of energy. We’ve not had black outs, rolling brown outs…that’s been good.
We are extremely concerned that if we disrupt that no matter how reliable our internal network is, if we have issues with the external supply that could be problematic.
Then secondly as a governing body, I want you all to think about this. You heard him talk about the loan guarantee. I’m somewhat familiar with that. The prior company I worked for did that for Plant Vogtle. But I want you to understand, the output of this plant…the level of output, about 1300 mega watts which doesn’t completely supply all of our needs. I want everyone to ask and this is a concern…the reason we’ve got the study going on. Is that a great investment for 8.6 billion dollars ? Because the output amount that you’re getting from this plant could be achieved by other generation sources for much less.
So the government in my opinion has to ask a question. Is that a good source of funding to guarantee that loan. I would just say as a tax payer and a citizen I would be concerned if that’s the best deal. I’m not saying it’s not, but I do think the question should be asked. And again, by the time this will be completed, this will be a 50 year old plant.
Conrad: I guess just to close out. I appreciate the time. It sounds like your timing and MLGW timing aren’t congruent. It does seem too good to be true in a way. But also something that should be taken seriously. My frustration here is it’s been on the table, this proposal, for a while now and has anybody up here heard anything about it?
Robinson: Councilwoman Robinson has and I’m going to let the council hear other proposals.
Conrad: My frustration is, it sounds like one of the council members has ….now this is in front of us and he’s saying we have a month and a half. You’re saying our study is not done until December and that puts into a very awkward situation.
Young: Just one other piece of information. It is my understanding from the letter of intent signed by my predecessor it was my understanding that there were some limitations on how the proposal could have been communicated. I don’t know if that may have added to some of this. Maybe some of the question around that. And certainly before we move forward with any option we will bring it before City Council. We have not asked the City Council to evaluate and wouldn’t ask you to evaluate the merits of such a deal. But obviously before we would even be willing to move forward we would bring it to the Council.
Conrad: But now it is before us. And not from you guys…..
Young: Well, how would we present it? What would be the basis of our presentation?
Conrad: You could have said when you were meeting with us on budget, hey, by the way, there’s this massive opportunity that also has the potential to be a massive downside for us.
Young: We might not have said it to you, and I apologize for that. We thought we had shared that with some….so??? Did he share it with you? ??? I don’t remember hearing about it til Thursday.
Conrad: Did he share it with you?
Robinson: This has been shared in Committee. Not the title of the project but there were some other sources available and we’ll be discussing those.
Conrad: Sounds like we’ve got a month and a half to discuss it and now they’re not going to be done until December . This is my frustration. I appreciate it. Thank you both.
Robinson: Let me get a question from Councilman Jones and then we’ll come back to you.
Jones: Thank you Chair Robinson. The first question I have is what was first executed seemed like a letter of interest, but what is being asked for now is a letter of intent whether its non binding or not, is that correct?
McCollum: So I’ll admit, I’m not a lawyer and I use those two terms interchangeably.
Jones: neither am I. I’m just saying as a way to explain this to everybody if I have an interest in something, I’m just saying well let’s further explore this. But then a letter of intent can be non binding is saying we have a plan to go down a particular path.
McCollum: I’m sorry if I caused any confusion. We’re perfectly comfortable with the term letter of interest.
Jones. Ok. So if there was a letter of intent, of interest, that was initially executed by Mr. Young’s predecessor did that have an expiration date? So why is that still valid.
McCollum: The Dept of Energy is aware that the individual who signed that letter no longer works for MLGW and so we are responding as the applicant for the loan, we’re responding to their request for information and they simply said we’re aware this situation exists. We’d like to have an updated letter of interest signed by an officer who currently works for the utility.
Jones: Do you have a framework of what the letter, let’s just say this second updated letter would look like? Are there material differences between that one and the one that was previously signed? Does that obligate us to anything more than what the initial letter did?
McCollum: First answer. I’m fine if you took the letter signed by Jerry Collins, white out Jerry Collins name and have someone else who currently works for MLGW sign it to satisfy the concern from the Department of Energy. And so, based on that, the answer to your second question would be no.
Jones: And then, could you talk about, maybe you don’t know, have this figure. What we would be looking at as an expense to connect to MISO? It could be 10, 20 million, 30 million dollars off, just some figure we could have in the public domain.
McCollum: Best estimate going in and the way you get to a final number is you make a request for transmission service and then you get your interconnection and then you set up your lines. So the going in figure is approximately 50 million dollars. However, we’ve built in contingency into the project plan for up to 100 million dollars.
Jones: And that is the cost, that Mr. Young indicated, would be borne by the rate payers here?
Jones: It wouldn’t?
McCollum: No, again the savings that are indicated in the ICF report…net all of those costs.
Jones: But that still, for us to say though, for us to have a back up to MISO we still would have to make an expenditure, would we not, even if we do recoup it down the road a bit? If we don’t have those transmission lines there, we have no means right now of connecting to MISO and they don’t just magically appear. We’re talking about 50 to a hundred million dollars, who pays for that?
McCollum: I’m glad you asked that, let me clarify. So when I talked earlier if we had a signed power purchase agreement those future streams of savings justify financing that we could provide to pay for infrastructure improvements inside MLGW system as well as the transmission interconnection expenses and fees to MISO.Robinson: I need to interrupt now. Councilman Colvett wants to move on to his committee meeting, we will have to continue this discussion….do you have a question.
Jones: Mine is just a last comment. When I first learned about this, I though that we under, it seems like we’re not necessarily under a time constraint. It’s nuclear development under a time constraint. I think, we can’t make your time constraint ours. I would much rather us have a comprehensive report and this be one of the options. There could be three, four five different alternatives out there. And, I’d rather us get from MLGW saying these are what our options are rather than one that’s self imposed by one offer when there could be others out there.
Robinson: Any other questions or concerns? Thank you for presentation. This meeting is now adjourned.