Traverse City Record-Eagle

March 30, 2013

Efficiency study gets audience

Special to the Record-Eagle

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TRAVERSE CITY — A long-awaited efficiency study of Traverse City Light & Power gets its official introduction next week.
The Traverse City Commission and TCL&P board are holding a combined study session at Monday at 5:30 p.m. in the commission chambers, at which time they’ll receive the report.
The study was contracted after Mayor Michael Estes raised the issue of whether the utility efficiently spends money on its operations and staff.
Estes anticipates representatives from Hometown Connections, which performed the study, to give a relatively short presentation to allow time for questions about the nearly 100-page report.
”I’ve got my fair share of questions for them,” he said. “Some things are not clear to me.”
The study has been public for about two weeks and includes 77 recommendations ranging from putting more information in customer bills to better bookkeeping procedures for transferring money to the city. 
Pat McGuire, TCL&P board chairman, said many topics already are being addressed.
“Of course, this joint meeting is an opportunity for the city commissioners and directors to ask questions of the study authors,” he said. “In addition to that, we’ll get together and address the points of the study going forward.”
Estes said the study was more comprehensive than expected but didn’t address staffing questions. But he said TCL&P already addressed the majority of his concerns by recently eliminating some positions.
”(The study) did point out a few positions they thought were questionable,” he said.
Estes also believes the study settles the question about whether the utility should build its own power plant, though it didn’t specifically do so.
“In my opinion, it clearly indicates that we should be buying power and our own generation doesn’t make a lot of sense,” he said.
McGuire agreed the study seemed to indicate the utility should be more of a power distributor than a producer.
“I’m slightly leaning that way, but I’m going to withhold judgment,” he said. “There’s not a simple formula to make that determination.”
The TCL&P board also will hold a study session on Tuesday at 5:30 p.m., when the 2013-14 operating budget and six-year capital improvement plan will be presented.
<\z14f”sans-serif”>Tim Arends, the utility’s interim executive director, said the $33 million budget is essentially the same as last year’s, with no rate increases, no change in the power cost recovery cap and zero net income.
At $12 million, the capital improvement budget is more than the past, thanks to two projects the utility is undertaking.
”Both are being paid for with funds within the utility and no bonding,” Arends said. 
He said the utility also will propose a second phase of its Community Solar Garden project that will be tied into the TCL&P grid. The first phase is a partnership with Cherryland Electric Cooperative and uses its system.