Perkasie Borough Council voted 8-1 to move ahead with a plan to reduce peak usage for conventionally delivered electricity.
Hatfield and Ephrata boroughs along with Perkasie are working toward an agreement to rent diesel generators to take some peak usage loads off their electric service wholesale provider, American Municipal Power Inc. of Ohio, known as AMP.
The Reciprocal Internal Combustion Engine, known as the R.I.C.E. project, aims to reduce the peak generation hours for electric delivered by AMP.
Randy Faulkner cast the lone no vote.
The project is a 20-year lease agreement between AMP and the participating boroughs.
An estimated savings of about $650,000 per year will begin in year two of the 20-year lease. The savings becomes the lease payment, which will be paid during the next eight to 12 years.
“After 10 years, we expect the project to be paid. Then we’ll have operation, maintenance and fuel costs,” said Andrea Coaxum, Perkasie Borough manager.
Total cost for the project is $10.74 million, with Perkasie’s share estimated at $4.6 million. Operation and maintenance costs are estimated at about $1 million, and diesel fuel estimates are about $700,000, Coaxum said.
“We will not be floating a bond issue [nor] doing a special borrowing for our share of the cost,” Ryder said.
That means taxpayers won’t be separately footing the bill for the project.
AMP owns the project and will lease land from each municipality. AMP pays for the project up front, Coaxum said.
Municipalities will lease from AMP, based upon the amount of money they’ll save.
“There is a potential to save 30-35 percent of capacity and transmission costs by turning the generators on when AMP believes a peak will be reached,” Coaxum said.
Savings will go directly back to AMP to pay for the project. AMP is predicting the line of credit will be paid off in eight to 12 years.
“One of the most important factors is when AMP accurately predicts a peak and turns the units on during peak usage times,” she said.
The agreement is based upon a January, 2020, start up, Coaxum said.
“In our area, winter months are actually our peak season for electric usage,” she said.
All three boroughs will lease units, and set them up on land they own.
