CONWAY — Horry County’s effort to conserve energy in its government complex and 25 other buildings hit a bump in the road recently as County Councilmen questioned the $170,000 it must pay electric service provider Pepco for an investment grade audit whether the county picks the company to follow through with the contract or not.
Pepco is an electric utility company that has been talking with Horry County since February about improving its energy efficiency.
The company presented the county’s Infrastructure and Regulation committee with a preliminary showing of $290,000 in annual savings earlier this year, which showed the county would have to make about $4.3 million in improvements. The county anticipates saving that and more during the duration of the 17-year contract.
If it does not meet certain savings levels throughout the contract, Pepco will make up the difference. The committee agreed with the report and moved the project into the next stage, which is the investment grade audit – a report that needs to be done for banks to back the tax-exempt lease-purchase the county would need to fund the project. A tax-exempt lease-purchase agreement is not a loan or a bond, but rather a funding device that allows repayment by using money already allocated, in this instance, for utility budgets.
Pepco got to work on the audit months ago and anticipates having it completed by Nov. 20 – a date the company hopes the county will approve the project to move forward. The audit comes with a price tag of $170,000. If the county goes with Pepco, that cost is part of the entire project. If not, the county is on the hook for $170,000.
That commitment didn’t sit too well with some County Council members, who demanded to know who approved that agreement and why it wasn’t brought before the administration committee, which often is tasked with handling funding situations, or the full County Council.
“I’m just not comfortable with it,” Councilman Harold Worley, who chairs the administration committee, said at its meeting late last week. “I’m not happy. You’re taking my job away from me... Maybe you should have brought it before this committee before now.
“I just think the process is broken. It should have been before this committee. Period. And it didn’t. Now why didn’t it?”
Council Chairman Mark Lazarus said despite the broken process, the county is still faced with this bill no matter what.
“I understand that. That’s a good question,” Lazarus said. “The fact of the matter is we have $170,000 at risk right now.”
The move toward energy efficiency is to meet the standards of the 2009 International Energy Conservation Code, which states municipalities and county governments need to save at least 20 percent on its energy costs by 2020 as compared to its costs in 2000. Pepco’s plan is to update existing lighting, HVAC, plumbing and control management systems.
Excluding the county’s airports, the county spent more than $3.3 million last fiscal year on electricity and water, which was about 7 percent above the previous year. This year’s budget is expected to increase by about $431,000 because of rate increases by the county’s providers, according to a memo issued by Barry Spivey, the county’s finance director.
A 6.1 percent rate increase is scheduled for Santee Cooper commercial customers in December, which is part of the reason the county is working on this plan now, said Gary Watson, director of construction and maintenance for Horry County.
“They’re the reason that we can show that this will be successful,” Watson said of Santee Cooper. “Their rates are incredibly high and getting higher all the time.”
But the Nov. 20 date may be threatened now that Worley asked to meet with County Administrator Chris Eldridge and County Attorney Arrigo Carotti to find out why the administration committee or the full council did not know about this $170,000 stipulation. Worley said Tuesday the three had yet to meet and he plans to have that meeting before the administration committee reviews the plans again.
Watson said the project went to the Infrastructure and Regulation committee because oversight will be the responsibility of Steve Gosnell, assistant county administrator for infrastructure and regulation.
“I can assure you we did not want to hide anything from this committee,” Watson said.
Contact JASON M. RODRIGUEZ at 626-0301 or follow him at Twitter.com/TSN_jrodriguez.