The Air Force has signed a $281.6 million contract with Long Beach, Calif.-based City Light & Power to privatize the electrical distribution system at Hill Air Force Base, Utah.
The power company will invest $5 million during the first year of the 50-year contract to bring the installation’s electrical system up to industry standards.
The agreement is the second utility privatization contract the Air Force signed this year for Hill, reported the Standard-Examiner. In January, officials signed a $288 million contract with Voorhees, N.J.-based American Water Operations and Maintenance to privatize the water distribution system and wastewater collection system, a deal which included a three-year, $3.6 million investment to bring those systems up to standard.
With reductions in funding for installation support in recent years, maintaining utilities has become a lower priority, Rick Weston, director of the utilities privatization program management office at the Air Force Civil Engineer Center, told the paper.
“Maintaining utility systems is no longer a core competency of the Air Force. Private industry does it day in and day out, so they can normally do it cheaper than we can,” Weston said.
The Air Force has privatized 65 systems over the past 15 years, saving about $337 million, he said. The service has 86 systems — including electric, natural gas, water and wastewater systems — in various stages of the solicitation process.