Tuesday, August 16, 2022

CFPUA approves $107.3 million bond package including $43 million for Sweeney upgrades, rates to increase next summer

The Cape Fear Public Utility Authority has approved over $100 million in bonds for several projects. (Port City Daily photo | Benjamin Schachtman)
The Cape Fear Public Utility Authority has approved over $100 million in bonds for several projects. (Port City Daily photo | Benjamin Schachtman)

WILMINGTON — On Wednesday, CFPUA approved a bond package to fund over $100 million in upgrades and new projects. Customers will see rates increase next summer to begin paying off those bonds.

Related: Are CFPUA ratepayers willing to pay $215 million for Sweeney upgrades?

The Cape Fear Public Utility Board also awarded a $35.9 million contract to Ohio-based Adams-Robins Enterprises Inc. to install eight new granular activated carbon (GAC) filters at the Sweeney Water Treatment Plant.

While PFAS levels have decreased significantly in the Cape Fear River since Chemours implemented source-capture procedures, CFPUA has maintained that further reduction of the chemicals is worth the expense, which includes $43 million for upgrades at Sweeney, $3 million for a construction support contract with Black & Veatch (who also received roughly $2.7 million for design work on the upgrades).

The plant upgrades are expected to come online in 2022, with a 34-year lifespan; the increased operating cost for the expanded facility is expected to be $2.9 million annually, with a lifetime cost of $215 million.

To help pay for these upgrades, CFPUA approved the sale of 25-year revenue bonds, totaling approximately $107.3 million. In addition to the Sweeney upgrades, the bonds will provide $15.4 million in funding for CFPUA’s share of an additional raw water pipeline from the intake upriver to Sweeney.

Related: Taking a look at the latest PFAS levels in CFPUA drinking water from Sweeney Treatment Plant

An additional $48.2 million from the bond sale will be used to refinance existing debt; according to CFPUA, this will save customers roughly $4.2 million over the debt’s lifetime. Lastly, proceeds from the bond sale include $650,000 to cover the cost of the bond issuance process itself.

According to CFPUA, the bonds are scheduled to be considered for approval by the North Carolina Local Government Commission on October 1, with an expected sale date of October 17.

Earlier this year, CFPUA debated whether or not to defer the debt service on the Sweeney project — that is, whether or not to hold off rate increases until the upgrades are online in 2022, or sooner. According to CFPUA, rate increases will take hold next summer.

In July 2020, the average CFPUA customer is expected to see $5.57 increase on each bimonthly bill (or $33.42 annually). That average increase will include $4.42 for the Sweeney project and $1.58 for the additional raw water line — with a savings of 43 cents resulting from refinancing. These figures are approximate; smaller households or single residents may see smaller increases, larger households, and commercial or industrial customers will see larger increases.

Below: CFPUA released the following video, detailing the Sweeney upgrade project.

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