Some members of the Oak Ridge City Council and some residents have had a few concerns related to the U.S. Department of Energy and its contractors, including whether the DOE sites are doing enough to encourage new employees to live in Oak Ridge and whether DOE is paying enough on its payments in lieu of taxes to the City of Oak Ridge.
A more recent concern is whether DOE is paying enough for water supplied by the city to Oak Ridge National Laboratory and Y-12 National Security Complex, which are both federal sites.
On Tuesday, the Oak Ridge City Council could discuss these issues as it meets in a non-voting work session with Kenneth R. Tarcza, manager of DOE’s Oak Ridge Operations. The work session, which is open to the public, starts at 6 p.m. Tuesday in the Central Services Complex on Woodbury Lane (behind the Kmart shopping center).
Among the DOE-related items on the agenda are a discussion and review of city-DOE relations, local hiring for DOE projects, housing, and “other related issues.”
Also on the agenda is an overview of the water rate analysis done by utility rate consultant Chris Mitchell. Council approved an increase in the water and sewer rates on first reading this month and is expected to consider them again on second and final reading in October.
The increases passed on first reading on Monday, September 12. Council amended the proposal to roughly triple the amount that DOE would pay on consumption over 20 million gallons per month. That increase from $1.08 to $3 per thousand gallons for consumption over 20 million gallons per month in 2017 would only apply to ORNL and Y-12.
Among other things, City Council members who supported the increase pointed out the discrepancy between the proposed $1.08 rate for DOE at ORNL and Y-12 in 2017 and the average household rate, which would have a residential customer who exceeds the minimum 2,000 gallon consumption pay $7.05 per 1,000 gallons for consumption between 3,000 and 10,000 gallons.
But the proposed DOE rate, known as a retail rate, would only apply if the city and the department are unable to agree on a new contract by the end of March. DOE currently pays a flat annual rate on water consumption at ORNL and Y-12.
Like the rest of the city’s water consumers, including residents, other DOE sites such as the Oak Ridge Office and East Tennessee Technology Park pay the retail rate, which is based on monthly consumption.
Oak Ridge city staff members and DOE officials have pointed out that water consumers inside the city, such as households, pay distribution costs in addition to production costs, while DOE only pays the city for water production at ORNL and Y-12—and not distribution. Those sites have their own separate distribution costs, officials say.
Oak Ridge officials have said the distribution costs, which include pumping water up hills and maintaining miles of pipes, account for more than half of the water costs inside the city.
Still, even two Council members who opposed tripling the retail water rate for ORNL and Y-12 said the rate could be increased, but they just didn’t know by how much. Oak Ridge City Council member Chuck Hope has said that DOE ought to at least pay the production cost, which is currently $1.50 per thousand gallons. Last week, Oak Ridge Finance Director Janice McGinnis said the rate that the city charges DOE is more than or equal to the production cost.
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