Rock Hill city officials plan to take over operation of two electrical substations currently under Duke Energy’s control in an effort to boost service reliability.
The company and the city were in talks earlier this year for Rock Hill to buy two substations after a series of equipment failures at a Duke-operated station knocked out power to thousands of utility customers.
But purchasing the transformers and equipment Duke uses at its substations is not in the best interest of the city, said Rock Hill Deputy City Manager Jimmy Bagley, who oversees utility services.
The city owns the land where two Duke substations sit. One is at an industrial park on Mount Gallant Road and the other is along Albright Road in southern Rock Hill.
Duke owns a third substation on Charlotte Avenue and the city owns one nearby.
Rock Hill already has plans to upgrade its Charlotte Avenue substation and stop using Duke’s.
Upgrading that substation equipment will cost as much as $1.5 million, Bagley said, but it could be as long as a year before all needed equipment arrives and work can be done.
If Duke is asked to remove its equipment from the Mount Gallant industrial park and from Albright Road, it will cost the city up to $2 million to replace it.
The city and Duke are still negotiating the changes, Bagley said, but the move for Rock Hill to operate its own transformers should improve quality for electric customers and give city employees direct access to equipment when problems occur.
Duke has “offered several options for increasing reliability” in Rock Hill, said company spokesman Ryan Mosier.
The company feels it has made improvements that have resulted in better service, he said, but it respects “the city’s right to build their own substations as an option.
“We understand the city wanting to own and operate their own facilities, and we will work with them to ensure a smooth transition if that’s the path they choose,” Mosier said.
Most of Rock Hill’s electricity supply comes from the Catawba Nuclear Station, which Duke manages.
Bagley and other city officials called a meeting with Duke this summer after some people became concerned about electrical reliability in Rock Hill.
Shortly after, Duke replaced the faulty transformer at one of its substations and widespread power outages in Rock Hill have since been curbed.
In an eight-month period between October 2012 and May 2013, Duke’s feed into one of its substations failed five times, city officials said. On average, 6,641 customers were without power each time.
Equipment failures weren’t the only problem Rock Hill officials said they noticed with Duke running three local substations.
The company’s response time when problems happened often prolonged customers’ wait to have power restored, Bagley has said.
After the initial summer meeting, Duke said it would install alarms at one of its substations and send a service technician to the scene as soon as possible if problems occurred.
The city of Rock Hill has alarms installed at its substations and the majority of workers on its repair crews live locally.
Bagley isn’t sure, he said, why leaders originally decided to choose Duke or any other company to run substations on city-owned land while Rock Hill acted as a municipal electricity provider.
The city of Rock Hill has operated its own utility division for more than 100 years. When the current substations came online, he said, most cities weren’t in the business of owning their own transformers, which may be one reason Rock Hill operates in conjunction with Duke.
Investing in six city-owned electrical substations – with two new substations planned – will improve Rock Hill’s overall utility service, Bagley said this week.
The money to pay for the improvements will come primarily from two sources but future rate increases won’t be one of them, he said.
Several years ago, the Rock Hill City Council approved an electric rate increase specifically for capital projects. At other times, the council has raised customers’ rates because Rock Hill’s cost to buy the power from its supplier has gone up.
The one-time rate increase – intended to start raising the money for major projects – will help pay for upcoming substation costs, Bagley said.
In addition taking over Duke’s sites, Rock Hill has plans for two new substations – one on Stewart Avenue near downtown and one in Riverwalk, a residential, industrial and recreational development near Interstate 77 and Cherry Road.
New substations cost up to $2.5 million to build.
The downtown electrical facility will serve anticipated new business customers in Rock Hill’s “Knowledge Park” – a planned development marketed as transforming the city’s former textile area.
The Riverwalk substation will serve numerous homes, industrial and commercial businesses and attractions such as the city’s cycling venues.
Rock Hill will see savings, Bagley said, from not paying Duke for its substations under a leasing agreement.
Those savings can be used to build and maintain city-owned substations, he said.
Rock Hill likely will borrow money to pay for the substation projects, he said, but the price customers pay for electricity should not be negatively affected.
While the transition between Duke and Rock Hill takes place, Bagley says customers won’t see power interruptions.
Electric customers “should never know the difference,” he said, adding that customers will be shifted to alternate substations for power if their normal substation is under construction.
Anna Douglas • 803-329-4068