Earlier this month, board members agreed to sign a five-year contract with Consumers for electric power to the new convention facility being built on Monroe Avenue. Part of that agreement, which was approved by the CAA on Dec. 4, has the utility giving the lines that will feed electricity to the building to the authority for free.
Those transmission lines, along with the $13,000 in switching equipment the utility donated, are worth about $1 million to the board.
Had the CAA gone with another electric supplier, it may have had to pay for the lines and the gear.
“That would all be part of a negotiation process on whose lines somebody else might use or might not use, and whether they would buy it from Consumers or others,” said Dale Sommers, CAA project manager.
“So, yeah, it would have been part of a major negotiation process. If no one else would have paid that cost, then the Convention and Arena Authority would have had to pay it, ” he added.
“We did contribute a significant amount of up-front costs to the project,” said Rich Collins of Consumers Energy.
“That’s not atypical of what we do. When we look at a new customer, we look at how much work do we do up front to hook up that customer, and there are some various ways we apply our regulated tariffs,” added Collins. “But it’s not uncommon that we will give a new customer a credit up front for ‘X’ amount of construction work that we do.”
Corporate Account Manager Todd Duncan represented the utility in putting the package together for the publicly owned facility. The new contract has a service date of April 1 and capacity will be limited to 70 amps at 12,470 volts then.
Consumers expects that full-load capacity will be available in early June.
Consumers also offered the CAA its most economical rate, known as General Service Primary Rate D. Rate D is for governmental units with a billing demand of less than 25 kilowatts.
“The rate structure is based on the current structure that they have, because they already supply power to the existing part. And under how rates are regulated, those rates will be readjusted based on the additional volume that we have as everything goes on-line next April when all the equipment is tested,” said Sommers.
Sommers added that Consumers really didn’t have much flexibility in negotiating the electric rate with the CAA, as the Public Service Commission in Lansing regulates the pricing structure for power.
Consumers is a subsidiary of the CMS Energy Corp., the state’s largest natural gas and electric utility with six million customers.
Construction on three exhibit halls, loading-dock space, all public restrooms and the east entry to the Grand Gallery should be finished by Thanksgiving 2003 with a grand-opening gala set for shortly after that date.
The final phase of the project is expected to get underway in June with the reconstruction of the Welsh Auditorium. That stage will cost $51 million and it will turn the Welsh into a ballroom and dining hall that will seat up to 4,000 for a banquet.
And the contract with Consumers should help construction crews meet those dates.
“The Convention and Arena Authority is very pleased with how the contract developed,” said Sommers, “and with the commitment Consumers made to meet the deadlines that we need to get things going.”