HomeMy Public PortalAbout11-15-1965 1-49
MINTUES OF THE MEETING OF THE COMMON COUNCIL
OF THE CITY OF RICHMOND, INDIANA SERVING AS A
COMMITTEE IN CHARGE OF THE OPERATION. OF THE
RICHMOND POWER AND LIGHT PLANT.
The Common Council of the City of Richmond, Indiana serving as a committee in charge
of the operation of the Richmond Power and Light Plant met in regular session in the
Council Chambers in •the City .Hall in said Gity Monday, November 15, 1965 at the hour
of 7:00 o'clock p.m. (est). Councilman Youngflesh presiding with the following members
being present: Messrs. Backmeyer, Bell, Henn, Hilligoss, Hollingsworth, Marino, .Paust
and Yount. The following business was had to-wit:
111 Councilman Yount moved the minutes of the previous meeting be dispensed with, seconded
by Councilman Marino and on voice vote was unanimously carried0
Councilman Hollingsworth moved the following claims be allowed and paid, seconded by
Councilman Marino and on voice vote was unanimously carried.•
Approved the following:
Bills in the amount of $180,979.16
Transfers from Cash Operating Fund to:
Utility Bond Fund $ 25,170.61
Cash Reserve Fund 49,993.80
Depreciation Reserve Fund 36,000.00
Mr. Beck presented the following letter:
November 8, 1965
A.E.Beck
General Manager
There is an amount of cash in the Cash Reserve Fund at this time cif $147,241.70.
This is due to U.S.Treasury bills amounting to $100,000.00 which matures October 31st,
and cash on hand of $47,241.70.
After the cash transfer is made at the next meeting on Monday, November.l5th, there
will be an additional amount of cash of $49,993.80. This represents one-half of the
net income for the month of October.
111 This will make an amount of cash in the fund after November 15th of $197,235.50.
This will be available-for investment.
Since most of this money will be needed for the City dividend on January 1, 1966
the Finance Committee recomends that we purchase $197,000.00 par value U.S.Treasury
bills which will mature on December 23, 1965. These bills will yield 3.7%. This is
the best yield available for this short period of time.
/s/ E.S.Porter, Office Manager
Councilman Henn stated that this subject had been discussed with the Finance Committee
and approved.
Councilman Marino moved the General Manager be authorized to make investment of
$197,000.00 in U.S.Treasury Bills which will mature on December 23, 1965. Councilman
Yount seconded this motion and on voice vote was unanimously carried.
Mr. Doyle and Mr. Tragler, representatives of,t he Indiana-Michigan Electric Co. were
in attendance to answer any questions on the new 10 year contract between the Richmond
Power and Light and the Indiana-Michigan Electric Company.
Councilman Hilligoss presented and read the following letter:
- "No doubt since the blackout Monday, November 8, in the eastern states, •everyone
has become more concerned about our power situation.
This should have no relation to the proposed contract for purchase power.
However, we must keep in mind what power is going to cost residential, commercial,
and industrial users. All of you are aware that if our present industry quit expanding
11 here and started building in other cities and states due to the high cost, Richmond
would be the loser. Many things are involved in cost. However, our -industrial rates
are high and we must be competitive, and if possible lower, if we are to have a
healthy industrial climate. .
I was in hope that this group would spend more time in selecting the type of
contract ,best suited for Richmond.
We should review the articles that appeared Wednesday, November 10 in the Palladium.
We have enough generating capacity, 68,000 K.W. This will meet our requirements
for two years; in fact, it is enough to meet our requirements for three years. The
projected peak for 1968 is 67,142 K.WI., based on a 5% gain for each year.
Now the question must be decided. Can we operate the Johnson Street Station
in full capacity, 35,000 K.W., or must it be retired?
I have the understanding that this plant must be retired.
If this is true, it would eliminate the 32 employees and the $192,000 payroll
we now have at that Station. Why should we retire Johnson Street? Let's keep
our annual payroll of 14 million dollars and 172 employees. We ran Johnson St.
last September and produced 11,094,500 K.W. Hrs. for 7.83 mills. Under the new
proposed contract and closing Johnson Street, we would not equal this cost per
K.W.Hrs. until 1974, nine years from now.
Assuming we close Johnson Street and purchase all power requirements over
33,000 K.W. or 19,500,000 K.W. Hrs., the difference betweenxhitewater Valley
capacity and purchase is as follows:
1965 peak of 58,000 K.W. - purchase 25,000 K.W. = 9.13 mills
1966 peak of 60,900 K.W. - purchase 27,900 K.W. - 8.82 mills
1969 peak of 70,499 K.I . - purchase 37,499 K.W. - 8.2 mills
1974 peak of 89,975 K.i . - purchase 56,975 K.W. = 7.8 mills
1975 peak of 94,473 K.W. - purchase 61,473 K.W. = 7.7 mills
At the end of this ten-year contract we would be paying the minimum of
2,266,947.28 or buying 55% of our power needs for the year of 1975.
Now it is understood that Richmond can install generators if we choose. Sure,
you may put in •as many as you wish. The question is...Can you load them? Now,
if you would elect to install a 65,000 K.W. unit, it would be 1975 before you
would be able to operate near full capacity around the clock.
Now, let's review the past. The Black & Veatch report was completed and
given to you on March 18, 1965. After two meetings the majority wanted to install
generating capacity before contacting I & M for a better contract, even though
Black & Veatch recommended we contact I & M.
After contacting I & M for a new contract, a meeting was held on Jund 15.
After reviewing this new contract we felt that the following changes should be
made: .
1. Change from 10-year to a 5-year contract;
2. Change capacity from 60,000 .K.W. to 100,000 K.W.;
3. Change in kilovolt-amperes and KVA;
4. Additional minor changes in wording.
There were no concessions made on the above-mentioned items 1, 2, and 3,
which were at one time believed necessary.
This contract has been reviewed by Black and Veatch and they reported that
is a poor contract.
I feel this contract should be delayed until we investigate the following
possibilities:
1. Run Johnson Street's 15,000 K.V. unit (17 years old) and-.Whitewater Valley's
33,000 K.W. unit, and keep our 14 million dollar payroll;
2. Shorter term contract, suggest 5 years;
3. We have a total of 68,000 K.W. Capacity; generate all requirements for three
years and have a stand-by contract;
4. Review the merits of the Indiana Municipal Lealtue letter sent out on August
25 to all Municipal Officials (not Councilmen).
It states:
".. .If a city or town is unable to get such a rate, we believe itwould be.
worthwhile to petition the ,Federal Power Commission and the Public Service
Commission of Indiana and object to the rate at which the electric power is
offered." (This refers to the R.E.M.C. Power purchases.)
The following cities are buying power from Indiana & Michigan: Anderson -
7.2 mills; Ft. Wayne - 8.6 mills; Sturgis, Michigan - 8.0 mills; .Bluffton - 8.6
mills; Auburn - 8.8• mills; Columbia City - 9.1 mills; Niles, Michigan - 9.3 mills;
Garrett, Indiana - 9.5 mills; and Richmond, Indiana - 11.23 mills.
Under the new contract we would pay 10.5 mills for the first 15,000 K.V.L,.
or 3,750,000 K.Y. Hrs. .
Should Richmond fail to receive a favorable contract with Indiana-Michigan,
we should contact all cities who are purchasing power from Indiana-Michigan and
to as a unit to the Federal Power Commission and Public Service Commission
15 I.
If this 10-year contract is signed tonight, there will be no need for any group to
make additional studies for the next 7 years. We will have two ways to go for the next
10 years: 4
1. You can sell to I & M any time during the 10 years.
2. You may be offered another contract, but it will tie Richmond up for an additional
10 years.
I move we table this contract until we explore all avenues."
Councilman Hilligoss moved that the contract be tabled for further study. Councilman
Backmeyer seconded this motion.
After serious discussion and consideration the Chairman asked that a voice vote be
taken on the motion. All those in favor of the motion voting aye. All those opposed
to the motion voting naye. On the call of the roll the following vote was recorded:
Ayes, �ackmeyer, Hilligoss and Paust. Nayes, Bell, Henn, Hollingsworth, Marino, Young-
flesh and Yount. The vote being declared 6-3 ft/. the defeat of the motion.
Councilman Henn moved that this body proceed with the signing of the contract between
the Richmond Power and Light Plant and the Indiana-Michigan Electric Company. Council-
man Yount seconded this motion..
The Chairman stated that a roll call would be taken on the motion and all those in favor
of the motion vote aye and those opposed vote naye. On the call of the roll the follow-
ing vote was recorded: Ayes, Bell, Henn, Hollingsworth, Marino, Youngflesh and Yount.
Hayes, Backmeyer, Hilligoss and Paust. The vote being declared 6-3 in favor of the
motion.
Mr. Doyle thanked the committee for the business like meeting in the new negotiation
and Indiana-Michigan wants to continue serving Richmond. Mr. Tragler also stated that
his company has in the past and would in the future be willing to negotiate contract
terms as the load demand grows in Richmond.
There being no further business presented, on motion duly made, seconded and carried
the meeting adjourned.
III
/;
y >
� �. �/mac; ea..........ea.......... ./ 4 ..._
Charles Youngfles Chair " `/,
Attest• trig
.Ath J. Reeg, ty Cle