CHARLESTON — A proposed agreement could generate roughly $60 million over the next 20 years for burying power lines underground, according to information shared during a special City Council meeting.
Council member Mike Seekings had requested a meeting with Dominion Energy South Carolina and Berkeley Electric Cooperative before City Council makes a final decision on new franchise agreements Oct. 27.
These agreements give the electric companies the right to provide electric and gas service to Charleston’s residents and businesses and to conduct any necessary work in public rights-of-way. In exchange, the companies pay the city an annual fee.
Residents regularly ask for power lines to be buried underground, which has historically been complicated and costly. Part of the agreement the city attorney spent a year negotiating with Dominion seeks to address that.
It works like this: Each year, a half-percent of the revenue Dominion makes from Charleston customers gets put into a fund for undergrounding. The city matches that amount.
Over the past five years, each entity has put about $5.7 million into the fund, public records show.
Each entity could put $30 million into the fund over the next 20 years, Dominion representative Danny Kassis told members of City Council during an online Q&A-style meeting Oct. 26.
Undergrounding power lines is expensive work that can cost as much as $2,500 per linear foot, Kassis said.
“We’re going to run out of money,” Seekings said. He asked why more money isn’t being set aside for burying power lines.
Kassis responded by pointing out that’s just the figure that will be dedicated to the undergrounding effort. Dominion will continue to pay the city an annual fee that’s equal to 5 percent of the gross revenue it collects from customers. The city could choose to put some of that toward undergrounding, Kassis said.
“We have a common goal, but I think you have to look at the funding source,” Kassis said. “There is a lot of money that gets generated from that franchise fee.”
The city expects to make between $11 million and $14 million from the agreement each year, the city attorney explained during a meeting earlier this month. Mayor William Cogswell confirmed nothing restricts the city from using some of that money to help with undergrounding efforts.
Council members also asked about part of the agreement that puts a cap on the number of undergrounding projects so that only two can be in the design and construction process at the same time. It also adds a deadline of six months. If projects haven’t gotten all of the approvals they need within that timeframe, they’ll be moved to the bottom of the list.
“We’re trying to create efficiency,” Kassis said.
A key barrier to efficiency is that the current system requires property owners to voluntarily give easements for power lines to be buried underground.
The only way the city will “fundamentally make meaningful change on this issue” is to pivot away from the voluntary framework and to take the easements like it does when approaching other public infrastructure projects, Council member Ross Appel said.
The mayor agreed, but noted that would be a city change that doesn’t involve Dominion or this franchise agreement.
The Oct. 27 meeting will be held at 5 p.m. at City Hall, 80 Broad St.