Newark City Council approves electric agreement with UD

By Tom Lehman 12:07am, January 29, 2013 - Updated 1:21pm, January 29, 2013
Newark City Manager Carol Houck discusses the new electric deal with the University of Delaware.
Newark City Council has given the approval for a 15-year electric contract with the University of Delaware.

The deal is significant for Newark because it allows the city to lock in a long-term agreement with its largest consumer of electricity.

"This is an important day for Newark to be able to hit this milestone and move forward and feel confident with the agreement that it's in place," City Manager Carol Houck says.

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Newark stands to receive at least $300,000 annually in subventionary funding from the school, which will then be added to the city's general fund. Those funds will be credited to UD's delivery charges, which are set to be a minimum of $2.6 million each year under the agreement.

The school is also allowed to generate five megawatts of its own power over 15 years under the terms of the deal; however, she says expansions to the university's campus should offset reductions from any self-generated power.

"We've estimated their growth over the next few years, which is expected to be about 13 megawatts, so we're in a good situation with that," she says.

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The city is also allowed to raise rates every five years, if needed, as part of the agreement, which goes into effect on Feb. 1.

Council also approved a renewable energy plan from its electric wholesaler, the Delaware Municipal Electric Corporation (DEMEC).

Houck says DEMEC, which also serves eight other cities and towns including Smyrna, Dover and Milford, took part in discussions for Newark's agreement with UD because the school is also the corporation's largest consumer of electricity.

You can view the agreement between Newark and UD on the city's website.

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