The Fredonia Town Council held a special meeting last week to discuss the outcome of the recent electrical audit performed by Richard Darnell. Darnell was on hand via telephone to discuss the study. 

Darnell informed the council the current 2.5 mVa transformer is reaching its maximum capacity and being pushed to the limit. Demand on the transformer continues to increase, making it imperative to address the overloaded transformer immediately. 

Darnell presented four alternatives to which he prefaced, none of the alternatives address the distribution issues to the south, “which is why we recommend a second substation.”

Alternative 1 – Remanufacture the 5.0 mVa transformer currently idle at the location.  This alternative would cost approximately $130,000. Darnell explained this would only be feasible if the transformer has a circular core. The only way to determine this would be to ship it to the manufacturer for draining and disassembly for approximately $10,000. If it is not circular, the town would be out the shipping and disassembling costs. If it is circular, the transformer would be remanufactured and a five-year warranty issued.

Alternative 2 – Purchase a remanufactured 5.0 mVa transformer for approximately $180,000 including a 10-year warranty.

Alternative 3 – Purchase a new 5.0 mVa transformer for approximately $220,000 including a 20-year warranty.

Alternative 4 – Add a second 2.5 mVa transformer, which would cost approximately $350,000 due to additional construction and engineering costs.

Darnell then presented information regarding the second substation. He feels if constructed, a second 2.5 mVa substation to the south would alleviate voltage problems on that end of town. The cost for the project would be approximately $870,000.

Town Manager Dan Watson asked Darnell if the current substation was upgraded from 2.5 mVa to 5.0 mVa and then an additional circuit and loop run to the south, would the voltage problem be taken care of.

Darnell said it could be a viable alternative, but a comprehensive system study and mapping study would have to be conducted.

Council member Jennifer Lukus asked Darnell why this alternative had not been researched during this study, to which he replied, it had not been discussed before.

The council discussed the alternatives and the most cost effective way to correct the problems with the electrical system. They felt the issue should be tackled in stages in order to correct the immediate issues now, and hopefully receive CDBG funding for the other issues.

Darnell indicated the study could be complete within 60 days, so the findings could be included in the grant application to CDBG due in June.

Town Clerk TinaMarie Horlacher asked Darnell, “At what point do you say this is not cost justifiable?”

Council member Brent Mackelprang replied, “rest assured, you do not want to lose this electric utility.”

The council agreed, the 20-year warranty on a new transformer would be worth the additional $40,000, adding peace of mind to the town and residents. They voted to purchase the new 5.0 mVa to address the immediate power issues for the town. Funds will be taken from the electrical contingency fund. The study would also be conducted to determine if a third circuit would adequately address the voltage issues to the south.

Darnell then presented the Rate Study. He explained the cost to purchase and transmit power was increasing, and rates would need to be increased accordingly. He felt however, the town could increase the minimum usage, currently $5.00, to $7.50, and make it a service charge instead. 

He also explained the demand rate for higher usage customers, such as business customers had never been charged, which resulted in approximately $60,000 per year in lost revenue.

Office employee Kelly Hilding asked for direction from the council on this matter. She said this issue had been presented in 2008 to the previous council and staff, but not rectified. The previous council had been informed that the problem was being taken care of.  The council voted, at that time, to issue letters to demand customers informing them of the oversight.  Hilding asked if this council would like to uphold that motion to notify the customers and begin billing correctly. 

Mackelprang directed to notify the residents that the billing issue “has been overlooked, and will no longer be overlooked.”

The council agreed to discuss the issue of the service charge/rate increase at the next council meeting to be held April 12.