LAFAYETTE — Lafayette Utilities System could be forced to pay for more than $175 million in upgrades in the coming years to comply with stricter federal regulations on power plant emissions, LUS Director Terry Huval told the City-Parish Council on Monday.
The figure is worst-case scenario for the city-owned utility, but Huval told council members he wanted to put them on notice for what could be major new expenses related to federal air pollution standards that are in the works.
“Hopefully, it will be a lot less than that,” he said.
Huval made the comments during a presentation Monday to the council of LUS’s proposed $230 million budget for 2011-2012.
That budget does not include any significant expenses to meet new federal environmental requirements, but future budgets will almost certainly show some impacts.
“Many of them won’t be known until additional studies are completed,” Huval said.
He said there is much uncertainty because the new environmental requirements are still being developed and utility companies across the country have been working to tone down the stricter standards.
“I think there is a lot of pressure to change it,” he said.
The new federal pollution standards could have a major impact on the coal-fired Rodemacher power plant near Boyce that Lafayette jointly owns with CLECO and the Louisiana Energy and Power Authority.
Lafayette has three natural gas power plants within the city limits, but about two-thirds of the city’s electricity travels down large transmission lines from the Rodemacher plant, Huval said.
The coal-fired Rodemacher plant generates cheaper power than Lafayette’s natural gas plants but also produces more pollution.
Coal-fired plants have been a main target of many of the new federal pollution standards, though the requirements could also require some upgrades at the city’s natural gas plants.
Huval said the $175 million estimate that he gave to the council on Monday would be for specialized equipment to clean up emissions.
That figure does not include an expected increase in annual operating costs to comply with new pollution standards, Huval said.
LUS, which provides water, sewer and electric service, is the largest component of the proposed city-parish budget of $558 million that the council is reviewing this month.
A budget hearing is scheduled at 1 p.m. Tuesday for LUS Fiber, the city-owned telecommunications service that offers telephone, television and Internet service.
Budget hearings for other city-parish departments continue through the month, and a hearing for residents’ input is scheduled for Aug. 25.
The council is scheduled to adopt the final budget on Sept. 27.
ON THE INTERNET:
For a listing of the times and dates of budget hearings, visit, http://www.lafayettela.gov/obcouncil/default.aspx and click on “Budget Meeting Schedule.”