The City Council of Norwich, Connecticut, recently approved the issuance of $150 million of revenue bonds for electric capital projects that will be pursued by Norwich Public Utilities, a public power utility.
NPU has proposed using up to $150 million tax-exempt revenue bonds paid for solely by electric revenue over the next 30 years.
“With the approval of the NPU Board and the Norwich City Council, we are able to make transformational investments in our electrical system,” said Chris LaRose, General Manager of NPU. “NPU looks forward to anticipating and meeting the needs of our community for generations to come.”
For perspective, NPU’s annual electric revenues in its current budget are $64 million. This proposal will not have any impact on the tax rates in Norwich. This will allow NPU to make critical infrastructure upgrades sooner.
Paying over time, rather than annually from capital budgets will significantly reduce the short-term impact on NPU rates and reduce rate volatility in alignment with NPU’s strategic plan, an agenda for the city council meeting noted.
NPU will have access to funds for a variety of large-scale critical projects to improve reliability and meet the growing demand for electricity.
While NPU allows for normal replacement of equipment funded through rates on an annual basis, the last major investment in electric infrastructure -- transmission lines, substations, equipment, etc., was more than 60 years ago.
It is far more efficient -- and cost effective -- to plan, design, and construct major upgrades -- and not respond to more and more frequent outages, emergencies, and repairs that would require large-scale responses from NPU over longer periods of time, the council agenda noted.
Potential projects include a new substation, transmission line improvements, as well as distribution system hardening.
NPU’s Purchase of additional Natural Gas Capacity through project RARE
The city council also approved NPU’s purchase of additional natural gas capacity through the Reliable Affordable Resilient Enhancement Project (RARE).
The project is designed to give Connecticut, Massachusetts, and Rhode Island increased access to low-cost reliable supply by upgrading sections of the existing pipeline outside Norwich.
The city council agenda said that this “may be the last opportunity to purchase additional gas capacity for NPU as additional pipeline expansion will be difficult if not impossible in the northeast due to political opposition in surrounding states.”
This project will support growth within NPU’s service territory, and any unused capacity can be re-marketed to offset costs.
The project will also provide NPU with an additional 1,000 Dth/ day of capacity.
• The anticipated in-service date November 1, 2029
