Company inks 50-year, $281M power contract for Hill AFB
By Mitch Shaw | (Ogden, Utah) Standard-Examiner | Published: June 17, 2014
HILL AIR FORCE BASE, Utah — The Air Force is paying a pretty penny to have a power company take care of the electricity at Hill Air Force Base for the next 50 years.
Late last week, the Air Force signed a $281.6 million contract with City Light & Power, Inc., based in Long Beach, California, to take over all the electrical utility work at Hill. The 50-year contract, which was executed by Defense Logistics Agency Energy, privatizes the base’s entire electrical distribution system, essentially allowing Hill to shift from the role of owner-operator to that of a customer.
Rick Weston, who heads the Air Force Civil Engineer Center Utilities Privatization program management office, said as defense funding has been cut over the past few decades, maintaining Air Force utility systems fell to the bottom of the priority list and consequently, utility systems at Air Force installations have degraded substantially over the past 30 years.
“Utilities privatization allows military installations to obtain safe utility systems that meet current industry standards,” Weston said. “Maintaining utility systems is no longer a core competency of the Air Force. Private industry does it day in and day out, so they can normally do it cheaper than we can.”
At Hill, CL&P plans to invest approximately $5 million during the first year of the contract to bring Hill’s electrical systems up to industry standards.
The CL&P deal is the second multi-million dollar utility privatization contract Hill has signed this year.
In January, the Air Force signed a $288 million contract with American Water Operations and Maintenance, Inc., in Voorhees, N.J., to privatize the water distribution system and waste water collection system at Hill. That contract included a three year, $3.6 million investment to bring those systems up to standard.
Weston said the Air Force has upgraded utility systems by privatizing them for the past 15 years. According to AFCEC engineers, the Air Force has privatized 65 systems, saving approximately $337 million. The Air Force currently has 86 systems, including electric, natural gas, water and waste water systems that are in various stages of the privatization solicitation process.
Nathan Rich, executive director of the Wasatch Integrated Waste Management District, said the new contract will not impact his plant’s relationship with the base. Hill purchases steam from Wasatch, which comes from the burning of municipal solid waste, to heat buildings on base. Rich said his company is finalizing a 10-year contract with Hill to continue to provide the base with steam.