Changing the power structure (8017)

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In the 1950s and 1960s, downtown economic centers were on the rise in the United States. Skyscrapers and large mixed-use buildings started popping up in cities across the nation.

After World War II, Americans had hope for the future, a passion for development and the need for a reliable power system to support their new places of business. The answer – build a network system.

Networks provide reliable power to many U.S. cities with the help of large transformers stationed at power plants. The network in Colorado Springs came about during the middle of the 20th century. “It’s a very complex, highly technical system,” said Chuck Sisk, principal engineer for Colorado Springs Utilities. The downtown network area extends from the corner of Platte and Cascade on the north to Vermijo and Sahwatch on the south.

The Drake power plant, located in the southwest area of downtown, is home to the two transformers that power the downtown electric network. Each transformer has a 20 megawatt capacity. The total combined “load,” or amount of power being used in the downtown network area is 20 megawatts, Sisk said. It would seem that the area has more than enough power to support itself plus any additions to the central business district.

Because each transformer only has the capacity to provide 20 megawatts, if one were to malfunction, there would be no backup power source for downtown. And if a developer wanted to build another high rise building like the Plaza of the Rockies, there is a strong possibility that the network, as it is now, would not be able to support the development. The network, Sisk said, is currently at “design capacity.”

Colorado Springs’ network is divided into a north portion and a south portion, and each area is served by a transformer. As for the rest of the city, the majority of homes and businesses beyond the network area receive power from a radial system that runs one “line” of power into a structure, with another available for backup.

There are less than two power outages per year on the radial system, said Gwen Happ, issues manager for the Colorado Springs Utilities’ public affairs division. Each outage, she said, averages 45 minutes. The downtown network system also boasts surprising reliability. “In my career, I think we’ve had one outage on the network,” Sisk said. His career spans 24 years. The network, Sisk said, is very reliable.

So what could possibly be at issue today?

As 2004 came to a close, Colorado Springs Utilities drafted a proposal for a tariff change for new large load users in the downtown network. The proposal, which is no longer on the table, would have required owners of new high rise buildings to purchase the equipment needed to hook up to the network. Large downtown buildings that require a lot of power, like Plaza of the Rockies or the Wells Fargo tower, did not have to pay for the equipment to connect to the network.

“In the public utilities world there is this whole other language about rates and charges,” said Beth Kosley, executive director of the Downtown Partnership. The partnership in December requested that the city not make a decision about the proposed tariff change to allow time to examine the issue. As Kosley sees it, requiring newcomers to pay for costly equipment to receive power from the network is not particularly fair and could help influence a business to set up shop outside the downtown network area.

“Where we’re still in discussions with them (utilities) about the nature of what costs we’re looking at within the network.” A meeting was held between the partnership and Springs Utilities on Feb. 7 in an effort to increase understanding between both groups. The partnership is working on a response to the proposed tariff change and will meet with Springs Utilities again to discuss the issue.

Doubling capacity under consideration

To increase the amount of power available in the downtown network area, Colorado Springs Utilities is considering building another transformer, a transmission voltage substation, Sisk said. The transformer would have a 50 megawatt capacity and would provide more than enough power to both existing buildings and those constructed in the future, he said. The new transformer, he added, also could service neighborhoods surrounding the downtown network area. Construction costs for a 50 megawatt transformer would be “in the millions,” Sisk said.

Within the network area there are grid networks and spot networks.

Small businesses, like the rows of restaurants and boutiques along Tejon Street, are considered grid network users. Multiple grid users receive power from one small transformer located near the string of businesses. This small transformer receives its power from one of the large transformers at Drake. These small businesses do not require a great deal of power compared to the high-rise buildings, which are the spot network users.

All spot users must have a vault on their property that contains two or three transformers and devices called network protectors. As it stands now, existing spot users only had to finance the construction of a vault and Colorado Springs Utilities paid for the transformers (usually a total of three) and the network protectors. Under the proposed tariff change from 2004, Colorado Springs Utilities would only pay for the first transformer. Newcomers would have been required to pay for the construction of a vault, the network protectors and additional transformers.

Vaults cost anywhere from $30,000 to $50,000; transformers for buildings usually go for about $20,000 each; and each network protector device costs about $10,000 (one for each transformer), Happ said. On the low end, developers building in the network system after the implementation of the proposed tariff change would have had to spend about $100,000 or more for additional equipment and electrical supplies.

“If you are within that network boundary, we’re going to require that you receive power off that service,” Sisk said. Though the proposed tariff change asked new spot users to put up a large sum of money for network-related construction, all users would still be guaranteed reliable service from the network.

Kosley and the downtown partnership are examining how a tariff change for new spot users could affect downtown development. Would new businesses choose to open outside of the network to avoid having to pay for required network equipment – and how fair is it that all downtown businesses must receive power off the network, with no other options available?

The matter is one of equity, Kosley said. “The equity of somebody who must hook up to the downtown network system,” she said. The fact that existing spot users did not have to pay for the lion’s share of their network equipment (transformers, network protectors) is not particularly important. “What was done in the past isn’t especially relevant,” she said.

The downtown area could experience the construction of new high-rise and mixed-use buildings, Kosley said. “There are a number of projects in the pipeline and I don’t know if they’re going to come to fruition immediately or in the long term,” she said. The redevelopment of the old Design Center building at Tejon and Colorado is being discussed, as is the development of the Giddings Lofts II, with residential units on the upper levels and retail on the ground level. These projects could face additional costs if a tariff change is approved within the network.

Focus may be on retail, entertainment

On Feb. 18 the Downtown Partnership met with several area real estate companies to talk about bringing more retail and entertainment to the downtown area. “There was a considerable consensus of the positive impact of the local retailers we have,” said Danny Mientka of the Equity Group. Mientka cite
d Terra Verde and Sparrow Hawk as quality local retail outlets that help bring a little something extra to the area. However, he said, the downtown area may not be able to attract big name, big box stores such as Barnes and Noble or Crate and Barrel. “Those retailers that tend to bring people.”

The Equity Group owns the Carriage House Lofts on Tejon Street, which is home to a Chico’s store. There is more retail space available within that property, as there is in other spots downtown, but Mientka is doubtful that more national retailers will move into the area any time soon. “A lot of interest will be driven by the retailers once there is an announcement on a convention center,” he said. An increase in residential properties in the downtown area could also have the potential to attract more retail opportunities.

“The strength of downtown is that we have a cluster of independent businesses downtown,” Kosley said. Attendees of the Feb. 18 meeting discussed the need for “something new on the street all the time,” Kosley said. That something new could be a farmer’s market or entertainment from street performers. “The basic idea was to get something happening out on the street to bring some excitement,” she said.

The Downtown Partnership, along with downtown property owners, residents and shoppers, are counting on excitement and new retail outlets to bring the downtown area to another level – one, perhaps, that could attract national retailers. As the downtown area expands, the need for another power source on the network will grow as well.

Technology offers many options

At the Feb. 7 meeting between Colorado Springs Utilities and the Downtown Partnership, Springs Utilities explained that to eliminate the network system would ultimately be too costly to downtown businesses and the city.

Because of the technology that exists today, there are more than two options for power, more than just the network and radial systems, Sisk said. These options include what is called an automatic throw over scheme and a static switch, which would transfer a building from one source of energy to another in a fraction of a second, he said.

Network systems, though reliable and highly innovative at the time of their inception, are no longer being constructed, Sisk said. “The network is considerably more capital-intensive to build and costs more to maintain,” he said.

Despite this, downtown businesses have no choice but to receive their power from a network that is already at its limits. To ensure growth and future economic development, action should be taken now, Sisk said.

The issue as a whole is still under discussion in an effort to increase the level of understanding for all parties and no concrete decisions have been made as of yet.

But Sisk is certain that 40 megawatts for the downtown area is not enough. “We need to do something,” he said.

- Stephanie.cline@csbj.com