AEDC plans for natural gas system privatization

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Arnold Engineering Development Center (AEDC) has taken an important step in the privatization process by entering into a contract with the Elk River Public Utility District (ERPUD) to replace the base's natural gas distribution system.

Privatization is essentially the sale or transfer of a current utility system owned by the government to a private sector utility operator. It includes transfer of assets as well as long-term operation and maintenance.

The project involves replacing the entire natural gas system, including shutoff valves, pressure reducing valves, and relief valves, with special attention to be placed on the underground piping. The AEDC gas distribution system consists of approximately 10,000 linear feet of piping.

Technical Director of the 804th Maintenance Squadron and Utilities Privatization Program Manager Bob Walker Jr., said the $1 million project was funded by the Air Force Civil Engineering Support Agency. The money is designated specifically for utility privatization.

"The secretary of defense years ago declared that all DOD facilities would begin a study to privatize utilities," Walker said. "It was believed that utility operation and maintenance wasn't a core function of the Air Force, and while we had civilians and groups at all the bases doing that work, we're in the war-fighting business and not the distribution of water and power."

Walker said Aerospace Testing Alliance (ATA), AEDC's operating partner, has done an excellent job in managing the distribution of utilities, but privatization is the order of the day.

Eddie Moffitt, manager of operations for Elk River Public Utility District wrote, "ERPUD has provided natural gas to the base since the facility was installed in the 1950s. It's been a good fit for all parties, and it just made sense for us to continue to provide service through privatization."

The contract for design and replacement of the piping was awarded in September. Construction will begin in May and is estimated to be complete in October 2011.

At the completion of construction AEDC plans to sign a new long-term contract with ERPUD for maintenance and natural gas supply. Walker said privatization may eventually involve the sale of AEDC's three other utility systems ─ electrical power, drinking water, and wastewater.