TIPP CITY — Further discussion about adding a second transmission interconnection line in Tipp City was held during a study session prior to Monday’s council meeting.
According to Eric Mack, director of municipal services, Tipp City’s electric department operates distribution lines, substations and transmission lines within the city of Tipp City, and the city currently has one transmission line, which is not typical for a city of Tipp City’s size.
“Due to having the one feed, there are reliability issues if that one feed goes down, as it did on Jan. 7. I believe it was plus or minus a two-and-a-half-hour power outage for the entire city. All of our customers were down and without power, and so we’re looking at a second interconnection to provide greater reliability when these issues occur,” Mack said.
The second interconnect project has been discussed for 40 years, according to Mack and city manager Tim Eggleston. The proposed project would involve working with American Municipal Power Transmission (AMPT), which would incur all costs to build and maintain transmission lines in Tipp City. According to Mack, the transmission lines would be sold to AMPT at an approximate value of $3 million. As part of the deal, AMPT would build a second interconnection line in Tipp City at an estimated cost of $9 million. No cost would be incurred to the city. Tipp City would be responsible for maintaining the transmission lines, and Mack said that the work would be contracted out, as is the current practice. The money accrued from the project would go back into the city’s electric fund.
“There’s a benefit of a total of $12 million from the selling of our transmission lines, our assets, as well as building the new second interconnection for us,” Mack said.
The second line would run through substation three, and that if one line went down, the other would prevent power from being lost throughout the entire city. Mack added that additional benefits included greater reliability, economic development, better rates, and some potentially avoided costs as Tipp City works on building a fourth substation in the city.
Council president Katelyn Berbach expressed some skepticism as to why AMPT would do so much for the city for no fee. According to Mack, AMPT is working to help AMP members, such as Tipp City, with transmission costs. There is a rate structure in place for the project through transmission fees within utilities, with AMP recovering costs through that structure.
“I just want to make sure, one, yeah, it’s a nice sweet deal to begin with, but we’re not going to overall our end-user — obviously, the customers — pay an exorbitant amount of money because we supposedly got a $12 million project,” Berbach said.
Eggleston added that since he has worked for the city, they have tried to work with DP&L for the second interconnect with DP&L wanting the city to pay anywhere from $2-$3 million for the project and only contract the transmission lines to DP&L. Mack said that if the city were to follow through with this project, they would have control over who they contract the transmission lines out to for maintenance.
“We would have a maintenance agreement with AMP, so we would be in control of getting a contractor out to fix an issue, whereas we’re at the mercy right now of another utility,” Mack said. “That’s the beauty of this, we would be more involved than we are.”
If the AMPT project were to move forward, Mack said that an ordinance would be required by council, followed by resolutions negotiating agreements with AMPT. From there, AMPT has to get approval for the project, among other things. Mack said that it would be a time-consuming process, taking at least a year to get off the ground.
“I love the idea of the project and I love that we have somebody other than DP&L to go through — my only red flag in this whole situation is that the apple just seems way too sweet,” Berbach said. “I appreciate all the work and I really love the fact that we’re hopefully going to go through and get this line put in, because it’s needed.”