LUB settles possible litigation
Katherine Fernandez
Loudon Utilities Board members met in closed session at the end of Monday’s regular scheduled meeting to discuss a possible resolution to an informal claim made from W. Rogers Company of Lexington, Ky., requesting additional money to finish the water treatment plant expansion project.

The water treatment plant expansion project began in the fall of 2012 and problems emerged between the board and W. Rogers Company when potential foundational concerns forced LUB to move a raw water intake station 35 feet to a new location, Lynn Mills, city manager, said.

“When they started working at the new area we started having a lot of heavy rains,” Mills said. “They ran into all kinds of problems because of the heavy rains, and they were delayed a lot, and they couldn’t solve the problem. And so the cost just kept mounting to the point to where they requested an additional $1,205,000, and we objected to some of their costs, quite a few of their costs.”

W. Rogers Company initially requested $1,205,035 in late 2014, but after negotiations, the board offered $637,233.50 as a resolution.

“When we came back into regular sessions, the board, a motion was made to approve task order request number three in the amount of $637,233.50 ... which essentially settles their claim,” Mills said.

In unrelated business, the board resolved an issue regarding the rising natural gas rate, Mills said. As a result of falling gas prices, Mills authorized the purchase of two strips of natural gas for the coming year from Atmos Energy. The first strip was for 4,000 dekatherms per day for 12 months beginning Jan. 1-Dec. 31 at a cost of $3.30 per dkt. The second strip was for 2,000 dkt per day for 14 months beginning Feb. 1, 2015-March 31, 2016, at a cost of $3.10 per dkt.

“The reason I was trying to get it was because we’ve been buying gas at $3.80 a dekatherm to $4 a dekatherm, and we’ve got a strip now of basically 6,000 dekatherms a day that we’re buying for basically $3.12 a dekatherm,” Mills said. “So it’s down substantially, which means our end user rates will be down substantially. They’ll be in the dollar or less range hopefully through the remainder of this year where it had been up as high as $1.18, $1.20 per 100 cubic feet.”

Mills said the resolution helps not only the utility but its customers as well, lowering prices for the coming year.

“It’s a bonus for our customers just like the gas at the pumps being way down how everybody benefits,” Mills said. “Our natural gas customers are going to benefit from this strip purchase also.”

In other business, the board:

  • Approved awarding a $729,358.46 bid to Service Electric Company for the labor and material package for the Sugarlimb Industrial Park substation. The existing 69 kilovoltage line in Sugarlimb will be tapped to feed the new 69 kV substation. Service Electric Company provided the only bid.
  • Approved the purchase of 12 additional Boomerang voltage monitors at a cost of $17,216.61 to further improve the quality of power in Loudon as requested by Bill Watkins, electric engineer.
  • Authorized the purchase and installation of fencing at the Fork Creek substation for a cost of $9,177 by Loudon County Fence LLC.