SMECO, U.S. Navy Sign Privatization Agreement - Southern Maryland Headline News

SMECO, U.S. Navy Sign Privatization Agreement


HUGHESVILLE, Md.—Southern Maryland Electric Cooperative (SMECO) and the U.S. Navy have signed an agreement to privatize three facilities in Southern Maryland. In the case of military bases, privatization means that a public utility takes over ownership and the operation of the facility's electric system for a specified length of time. For the next 50 years, SMECO will become responsible for the electric systems at the Patuxent River Naval Air Station in Lexington Park, the Webster Field Annex in St. Inigoes, and the Navy Recreation Center in Solomons.

According to SMECO's President and CEO, Austin J. Slater, Jr., "This is an agreement that has been many years in the making. We've always been proud to have Pax River as our largest customer-member. This is a win-win project for SMECO and the Navy."

The Patuxent River Naval Air Station was commissioned on April 1, 1942, and the electric system operates on a different voltage than SMECO's. Initially, the Co-op will address any safety issues that may exist and make necessary improvements to the electric system. Ken Capps, SMECO's Vice President of Engineering and Operations, said, "The Navy will get the depth of our Co-op's expertise. We're looking forward to fortifying the naval air station's capabilities and keeping it competitive with the other military facilities that vie for contracts, funding, and military responsibilities."

The award document was executed on May 1, and that began a 90-day transition period. SMECO will use that time to gather information and prepare procedures and business processes. On August 1, SMECO will commence serving the facilities. SMECO will restore service if customers have an outage and begin to install meters, address safety measures, re-conductor line, replace cable, and begin changing the voltage on the system.

SMECO has a dedicated project team to lead its efforts, and other employees will be assigned as needed. In addition to the Co-op's engineering department, this project will affect many areas of all departments, including billing, metering, information technology, and customer service. SMECO's line crews will receive training to become familiar with the electric system at the naval facilities. The Co-op will have a minimum of two crews on site during the next five years, a one-acre site to use for its base of operations, and office space in the public works department at Pax River.

The naval facilities use a substantial amount of power throughout the year. For 2008, Pax River, Webster Field Annex, and the Solomons Recreation Center used 194,611 megawatt-hours (MWh) of energy, almost six percent of SMECO's entire customer base, which used 3,346,787 MWh. The naval facilities accounted for 37.3 megawatts (MW) of energy demand, almost five percent of SMECO's total of 787 MW. SMECO will connect more than 1,160 services at the three facilities combined.

Source: SMECO

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