By Mark Waite
Valley Electric Association, Inc. this week announced it landed another major contract, a utility services deal worth $23.6 million to provide the electric distribution services for Creech Air Force Base.
A month ago, the National Nuclear Security Administration announced it had awarded a five-year, $61.6 million contract to VEA to provide electrical service.
On Nov. 20, 1997, the Secretary of the Department of Defense issued a directive that infrastructure on military bases be privatized, including electric, gas, sewer and water services, Tom Husted, VEA chief executive officer told the cooperative ambassadors back in September 2010. The Creech AFB distribution system was on the list for privatization; Husted presented it to the VEA board, which gave the authorization to move forward in studying the acquisition.
“We acquired a consultant who has a history at working with coops all over the United States to be able to do this,” Husted told ambassadors.
The deadline for submission was Oct. 6, 2010.
“Creech Air Force Base is not an enormous base; it is a very important base. But as far as installations and facilities, it is not one of the larger ones,” Husted said.
It’s a smaller system than the Nevada National Security Site, which Husted said was equal to half the size of the entire VEA system.
There were five different entities that were bidding for the Creech AFB contract, Husted said, including the city of Long Beach, Calif. and a northern Virginia company. But he said, “we believe nobody can do it better than Valley Electric. It’s right here, it’s right in our backyard and we believe we provide a superior product than other entities.”
VEA will purchase the system, but the government finances it, Husted said.
“As far as cash outlay for Valley Electric, there is none. That’s also a very attractive part of this overall process.”
Officials at Creech Air Force Base will officially turn over the reins of the base electrical facilities to Valley Electric Association on Jan. 27. VEA was awarded a 50-year federal contract to purchase, maintain and operate the electrical distribution infrastructure on the base.
Although the contract was awarded Sept. 28, there is a transition period and process before the utility officially takes over the electrical facilities.
Valley Electric Association’s contract with Creech Air Force Base is awarded in conjunction with the acquisition of the base’s electric infrastructure system. Under the 50-year agreement, VEA will provide the government with operations, maintenance, and renewals and replacement of the current electric system.
VEA will begin an inventory of equipment immediately and will establish full-time dispatch and base services including linemen and project management to meet the Air Force needs as required.
VEA will be constructing a permanent service center in Indian Springs and station several operations personnel in the community. In the event of major events, outages and construction of facilities, crews will be provided by VEA personnel and contract labor.
“We are honored to have been awarded the contract to serve the Creech Air Force Base,” Husted said in a prepared statement issued Monday. “The base provides significant contributions to our national security as well as our regional economy and we are extremely honored to be entrusted with providing for their electric utility needs.”
In accordance with direction from the secretary of the air force, VEA will work with base personnel to provide energy-efficient systems. The Pentagon initially developed plans for utility privatization to allow installation commanders to focus on core defense missions and functions by relieving them of activities that can be done more efficiently and effectively by others.
“We will be responsible for providing reliable and dependable utility services to each government or tenant connection within the service area of the base 24-7,” Husted said. “We operate one of the best utilities in the country and we are proud to offer utility services to the United States Air Force which undoubtedly is the best in the world.”
Officials at Creech AFB wouldn’t comment on the contract.