UTILITY COMMITTEE

The Utility Committee Meeting was held on September 25, 2006 at 5:00 p.m. with Chairman Carey presiding. Members present were Mr. Ruane, Mr. Slavin, Mr. Cregar, and Mr. Snaman. Members of Council present were Mr. McGiffin, Mr. Salters, Mr. Hogan, and Council President Williams.

AGENDA ADDITIONS/DELETIONS

Mr. Slavin moved for approval of the agenda, seconded by Mr. Snaman and unanimously carried.

Presentation - Inflow and Infiltration

Mrs. Sharon Duca, Assistant City Engineer, presented the results of the Sanitary Sewer Inflow and Infiltration Study (Attachment #1). Mrs. Duca outlined Phase 1 of the study, which included the cleaning and video inspection of approximately eighteen (18) thousand linear feet of underground piping. Mrs. Duca also provided details of the smoke testing and several pipe repair projects that are a part of Phase II. Information gathered from both projects will be used to generate and complete CIP projects for coming years.

Responding to Mr. Ruane, Mrs. Duca stated that Blue Beach Drive would be repaired and re-paved once the pipe repairs have been completed. Residents will be notified prior to any scheduled repairs and/or smoke testing.

Future utility based and key customer based projects will be reviewed with Kent County to determine eligibility for one time impact fee credits. Mr. DePrima, City Manager, provided further explanation on the proposed impact fee credits, noting that the City would reduce the amount paid to the County in impact fees. He advised members that he would work with the Finance Director to determine where the excess funds will be placed.

The committee took no action.

Update on Multi-pollutant Regulations (NOx)

Mr. DePrima, provided an update on the status of the proposed multi-pollutant air quality regulations. These regulations would effect McKee Run Unit 3 because it has a capacity rating of more than 25 megawatts and is capable of firing residual oil. Of the states that have decided to implement their own multi-pollutant air quality regulations in lieu of the Federal Clean Air Interstate Rule (CAIR) and Clean Air Mercury Rule (CAMR), Delaware is the only state to include residual oil fired electric generating units in their regulation. With limited run hours and very low generated megawatt hours, the significant capital investments required to comply with the regulations will be spread out over very few hours. This will amplify the financial impact to the City and its customers.

Mr. DePrima outlined the steps the City has taken over the years to improve the air quality. The release of mercury, the most hazardous of substances, is the biggest item the proposed regulation is attempting to control. Mr. DePrima stated that mercury is produced by coal burning operations and is not a problem or concern with the City’s power plants.

Mr. Ruane indicated that the City’s arguments against regulation 1146 have been made in the past and, to-date, have received no response from DNREC.

Mr. DePrima advised members that Mayor Speed had taken a four-page letter (Attachment #2) outlining the City’s position to a public hearing sponsored by DNREC (Delaware Department of Natural Resources and Environmental Control). The technical aspects of the letter were produced by Mr. Dean Blaha during his tenure as manager of the plant with Duke Energy. Mr. Blaha continues to work with PACE Global and NAES (North American Energy Services ) in the same capacity.

Mr. Salters asked what other course of action was available if the regulation is passed. Mr. DePrima stated that several municipalities have discussed possible lawsuits. He also stated that the City may consider shutting down the McKee Run Unit and buying electric like other municipalities versus passing along any additional costs to rate payers.

Mr. DePrima explained that the proposed regulations will be approved and passed by DNREC Secretary John Hughes, and will not be appealable to the Governor or the Legislature.

Mr. Carey requested that Mr. DePrima keep the committee informed of the status of the regulations.

The committee took no action.

Mr. Snaman moved for adjournment, seconded by Mr. Cregar and unanimously carried.

Meeting Adjourned at 5:46 P.M.

                                                                                    Respectfully submitted,

                                                                                    Carleton E. Carey, Sr.

                                                                                    Chairman

CEC/hf

S:ClerksOfficeAgendas&MinutesCommittee-Minutes20069-25-2006 UTILITY.wpd

Attachments

Attachment #1 - Inflow & Infiltration Presentation

Attachment #2 - Letter to DNREC regarding regulation 1146 from Mayor Speed