Electrical system won’t last long, the way it’s going

Anson Albarado voiced concerns June 3, over the potential sale of Cadott’s electric utility to Chippewa Valley Electric Cooperative (CVEC). If CVEC takes over ownership of the aging system, it would mean a needed upgrade, which the village cannot afford at this time, with less of a rate increase. Photo by Ginna Young

By Ginna Young

Although it wasn’t made public until this year, talks have been in the works for some time, to sell Cadott’s electrical system to Chippewa Valley Electric Cooperative (CVEC). The proposal was supposed to be given the go ahead for the next step June 3, but because some village residents voiced concerns, it was decided to obtain more information before moving forward.

Some, like resident and former village board president Anson Albarado, questioned why Cadott is even considering selling. The answer is simple – it is costly to upgrade the system.

“We don’t know if we got the funds to do it,” said village president Randy Kuehni.

A previous estimate put the upgrade at more than $7 million.

“My concern is, once you get rid of the electrical utility, then you have nothing,” said Albarado.

Albarado pointed out that the electric utility generates income, but if it was sold to another entity, that would no longer the case. He was also concerned that CVEC is not regulated by the Public Service Commission (PSC), meaning there’s no oversight.

Russ Falkenberg, CVEC president/CEO, said that is not true, as far as oversight goes, as the co-op has a sevenmember board who oversees the cooperative’s interests and finances.

“It’s local oversight,” said Falkenberg. As part of CVEC’s service territory, each Cadott village resident becomes a member and receives the same benefit. The fixed charge is determined by the number of members, per mile.

“The system has some serious safety and liability issues,” said Falkenberg.

He also says that it’s actually more like a $9 million project, because the $7 million was just for the upgrade and not the labor. If they take over ownership of the system, CVEC would treat the upgrade like any other upgrade for the cooperative, using their own employees to do the work and keep costs down.

Currently, CVEC’s system is stable and in good shape, making it the right time to do the project, with the plan to build for ability to expand. The village is on 2,400 voltage, which is difficult to find parts for, so CVEC wants to upgrade to 7,200 volts.

Village resident and former village clerk Sandy Buetow looked into the matter, and says another municipality she spoke with has no problem with the voltage or of finding parts.

“Here, you’re running so over capacity on certain sections of the line, that we’re just waiting for the phone call that we can’t put it back together,” said Nic Alberson, CVEC operations manager, who is also concerned over the safety of his workers.

Albarado wanted to know what benefit it is to the village to sell the system. For one thing, Falkenberg says they have to have an upgrade to attract new businesses, especially large manufacturers, as the Cadott community is growing by expansion from Stanley, to the east, and from Chippewa Falls, to the west.

“Where are they going to go to and how is the village going to support them?” asked Falkenberg. “It doesn’t make any sense to keep putting money into a system that is obsolete.”

If the village attempts to upgrade the system on their own, based on numbers provided by the village, CVEC projects there will be a 40 percent rate increase on residents, but it would be half of that through the co-op. No matter what, Falkenberg stresses that the village has to increase their voltage.

“You can’t do nothing,” he said. Beutow asked that the village hire someone to have a study conducted, as she wants due diligence done, while resident Jean Rygiel would like them to have a five or 10year plan, raising rates over time to finance that. Rolly Tichy, resident and former public works director, doesn’t think selling the electric utility is the answer.

“Personally, I think we should invest into the system, like we’ve done with our sewer system and our water system, in the past,” said Tichy.

Resident and former village trustee Les Liptak says Cadott is lucky to have the partnership they do with CVEC, but that it’s just basically a maintenance-type situation. Therefore, the village board agreed to complete a rate study, to see if the village could handle the upgrade financially.

Nick Goeman, auditor with Baker Tilly, pointed out that village electric customers are the ones who will pay for the upgrades and with bonds already in place, the village may not be eligible to borrow anything. Regardless, the rate study will be completed.

“That will give you context as to what you can and can’t do,” said Liptak.

Falkenberg says this is a long process that the two entities have to go through and wants people to understand, that if the agreement isn’t good for both CVEC and Cadott residents, he doesn’t want any part of it.

“I live here, I want to make sure the lights are going to stay on,” said Falkenberg.