LAFAYETTE — The city-owned utility system is preparing to make up to $88 million in upgrades to comply with more stringent federal environmental regulations on coal-burning power plants.
Planning is under way, and the first phase of the work — aimed at reducing air pollutants — must be completed by April 2015, Lafayette Utilities System Director Terry Huval said this week.
“It’s a big project,” he said.
Huval said the $88 million estimate is on the high end and the work would likely cost less.
LUS will borrow the money upfront and pay it back over 20 years through an increase to customers’ fuel adjustment charge that Huval estimated will raise the total LUS bill for electric, water and sewer by about 2 percent.
“It will have very little impact on our overall fuel adjustment charge,” he said.
The new U.S. Environmental Protection Agency air pollution mandates address air pollution at the coal-fired Rodemacher power plant near Boyce that Lafayette jointly owns with CLECO and the Louisiana Energy and Power Authority.
Lafayette has natural gas power plants within the city limits, but about 62 percent of the city’s power travels down transmission lines from Boyce, Huval said.
The Rodemacher plant was built in 1982, and Lafayette owns half of the facility.
Huval said the planned upgrades should meet federal environmental guidelines for the foreseeable future.
“The experts are telling us that what we are doing should last a long time,” he said.
The estimate of $88 million is far less than a worst-case scenario Huval gave to the City-Parish Council last year when he warned of compliance costs that could climb upwards of $175 million.
At the time, utility officials were still uncertain how strict the developing air pollution regulations would be.
The environmental upgrades come after LUS, CLECO and Entergy this summer finished the bulk of a $180 million project to upgrade the region’s electrical transmission grid, which had been straining in recent year’s to keep up with the area’s growing population.
LUS’s share of that project was $24 million.
Huval said this summer is the first in recent years in which area utilities could relax concerns about the possibility of rolling blackouts as the heat rose.