VINELAND — City Council on Tuesday awarded the last major contract for what local officials are calling the largest public works project in the city’s history.
When finished, the Vineland Municipal Electric Utility’s 64-megawatt power-generating Clayville substation on South Lincoln Avenue will have cost an estimated $72 million.
The project would eclipse the $60 million endeavor involving construction of a natural-gas power turbine system at the VMEU’s main plant in the 600 block of East Wood Street. That 60-megawatt system, which at the time was the city’s largest public works project, went online in June 2011.
When the Clayville substation is complete, it will join with the East Wood Street system to allow the VMEU to produce what city officials said is all the energy it needs without having to buy electricity from a regional power grid. VMEU officials said that will save the utility millions of dollars annually and keep rates low for its 25,000 residential and commercial customers.
“We will be good for 30 years,” City Municipal Utilities Director Joseph Isabella said of the impact of both projects.
But the substation must meet a June 2015 completion deadline for VMEU to possibly avoid paying out significant dollars.
Miss the deadline and VMEU must pay thousands of dollars a day to the energy grid, Isabella said. The money essentially reimburses the power grid for VMEU energy commitments, he said.
On Tuesday, City Council voted 4-1 to award a $24.7 million construction contract to the Pittsburgh firm of Infrastructure & Industrial Energy LLC. The contract also allows for nearly 9 percent in additional funds for contingency purposes. That raises the overall construction contract to slightly more than $27 million.
“We had that one right,” Isabella said of the cost of the East Wood Street project. “We’ll get this one right, too.”
The Pittsburgh company was one of two to make it through the bidding process. Coming in second was the Franklinville, Gloucester County, firm of C & H Industrial Services. The bid by C & H was about $89,000 more than the successful bid.
Isabella said construction is scheduled to start within a few weeks. The project is scheduled to be online by June 1, 2015, he said.
The city has already spent $35 million on equipment for the Clayville project, he said. About another $2 million was already allocated for engineering.
While city officials were happy with the proposed project, the utility’s future was not always bright.
In November 2003, residents approved a referendum that called for a new $57.5 million facility. Plans for the 100-megawatt power plant were scrapped 15 months later when construction bids exceeded $104 million.
Almost three years later, the city considered sharing ownership of the utility and closing at least one of its generators after a study showed the plant had zero net value and most of the equipment was obsolete. The $115,000 study looked at mechanical, economical and environmental factors and determined that it would be costly to upgrade the plant.
But residents again had their say about the future of the plant. They voted overwhelmingly in 2008 to approve the $60 million natural gas turbine project.
City officials said the vote likely helped save the utility and prevented the municipality from losing an operation it could likely never get back.
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