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The Great Eight Debate

City, Duke Energy spar over streetcar construction technicality

By Kevin Osborne · March 6th, 2012 · Cover Story
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If you listen to many native Cincinnatians, they will tell you their hometown is different from other cities. Special. Unique even. What works everywhere else doesn’t always work in the Queen City, and vice-versa.

Whether the provincial attitude is due to a sense of pride or a neurotic inferiority complex, its accuracy ultimately is a matter of personal opinion. But the assertion is holding true so far when it comes to constructing a streetcar system.

Despite three other U.S. cities having already built similar projects with little or no trouble involving their local utility providers — and several other cities in various stages of planning, also with no significant utility-related problems — a dispute involving a difference of five feet threatens to delay Cincinnati’s long-planned streetcar system.

That’s right: The latest hurdle to the $110 million-plus project involves a spat over just 60 inches.

The amount of space is how far Cincinnati officials differ from Duke Energy executives about what distance is needed to ensure adequate clearance between streetcar tracks and utility lines.

Based on the experience of projects built in other cities, Cincinnati officials insist a space of just three feet or, in some instances, four feet is needed to separate manhole covers from streetcar tracks.

Duke, however, said a minimum clearance of eight feet is needed to ensure worker safety from passing trains.

The dispute is no small issue. Using the city’s standard, it would cost a little more than $6 million to relocate Duke’s natural gas lines, electrical wiring and other infrastructure under the streets. But Duke’s standard pushes the cost up to $18.7 million, and possibly more.

There are 63 manholes in the path of the planned streetcar line. The 3.6-mile path stretches from Cincinnati’s riverfront through downtown and north to Over-the-Rhine, ending near Findlay Market.

Until the dispute is resolved, Cincinnati and Duke remain at an impasse about how to proceed with the relocation.

Project managers at City Hall had been negotiating with Duke engineers for nearly two years when the dispute became public on Feb. 8. That’s when Julie S. Janson, president of Duke Energy Ohio, sent a letter to Mayor Mark Mallory stating the company wouldn’t move any utility lines until the city agreed to Duke’s terms and conditions.

“When Duke Energy Ohio initiates changes such as moving gas, chilled water, fiber and electric infrastructure, the changes generally are intended to improve service, and so the costs associated with such work are shared by all customers,” Janson wrote. “Duke Energy Ohio has an obligation to keep those costs as low as possible. In this situation, the proposed infrastructure change is to accommodate the streetcar.”

She added, “Mindful of the financial burden to all of our customers, we need your commitment to reimburse Duke Energy Ohio for the costs to relocate these underground facilities. The company will not relocate its infrastructure until the city commits to reimbursement of costs caused by the streetcar utility project.”

Wait. Who said the streetcar system was a “utility project?” There’s a reason that Duke used this unusual phrasing, but more on that in a moment.

Duke’s dire pronouncement didn’t upset city officials.

“It is unfortunate and disappointing that Duke Energy has decided to walk away from their commitment to be a good faith partner with the city,” Mallory said shortly after receiving Duke’s letter. “The streetcar is the new reality for Cincinnati and this project will move forward. It is a transportation investment that will fuel the growth of our economy for years to come.”

The mayor added, “In many of the cities that are developing streetcars or light rail, similar issues about the scope and cost of utility relocation have come up; however, they have never prevented the projects from moving forward.”

In fact, Mallory is correct.

A review by CityBeat found that relocating utilities wasn’t a serious point of contention in Portland, Ore., or in Seattle or Tacoma, Wash., the three cities that have modern, electric-powered streetcar systems up and running.

It also hasn’t been a major issue in Atlanta, Washington, D.C., or Tucson, Ariz., where projects are under construction. And it hasn’t caused stumbling blocks so far in Milwaukee or Charlotte, N.C., where planning is underway for such systems.

Charlotte also happens to be where Duke Energy is headquartered. It was Charlotte’s streetcar project that Cincinnati’s staffers used as a guide to draft the local project’s “rules of practice,” which is where the three-foot clearance standard originated.

Currently in Charlotte, manholes are located within three feet of rail beds.

That’s not uncommon: The three-foot clearance rule is standard where most streetcar systems and light rail lines are operating nationwide. In Portland and Seattle, some manholes are located within the track’s span, between the rails.

“We budgeted an amount for relocation based on discussions with Duke and the rules of practice developed for the project,” says Chris Eilerman, Cincinnati’s streetcar project manager. “We believe the rules are sufficient to meet any utility conflicts within the zone of influence.”

City officials already have reached deals with two other local utilities; the city will pay about $3 million to move telephone lines for Cincinnati Bell and pay about $6 million to move lines for Greater Cincinnati Water Works.

It’s still negotiating with the Metropolitan Sewer District and with Level 3 Communications, which has some fiber optic lines under the streets.

Overall, the city of Cincinnati has allocated $16.5 million for utility relocation.

Duke representatives were aware of conditions in other cities, but say the local situation differs significantly.

“We’ve certainly done a lot of looking at other utilities ...

that is information we had as part of our analysis,” says Duke spokesman Jason Walls. “Cincinnati is very different than these other cities and how our electrical system is designed. It’s not a true apples-to-apples comparison.”

Cincinnati’s system has more redundancies, which involve a series of backups to ensure reliability of service, Walls adds. As a result, crews have to access the system more frequently to make minor repairs.

At the mayor’s urging, Duke engineers traveled to Portland two weeks ago to once again examine its underground setup.

Meanwhile, construction will begin soon in Over-the-Rhine, Eilerman says. Most of the initial work will involve moving water mains. The impasse with Duke only will affect the project later this year once work moves downtown, he says, adding that he hopes ongoing negotiations with the company will yield a deal before then.

The project’s opening already has been delayed once — from late 2013 to mid-2014 — due to delays caused by Ohio cancelling $52 million in state funding last spring at Gov. John Kasich’s urging. A federal grant restored $10.92 million of the amount in December, but the project’s design had to be tweaked.

Julie Gustafson, a spokeswoman for SOJ Inc., a contractor that helps operate Portland’s streetcar, says utility firms typically err on the side of caution, at first. Portland’s first phase opened in 2001. Other links have been built over the years, and its sixth phase is slated to open this fall.

“The original reaction by utilities here was that we needed to get very far away,” Gustafson says. “As they learned from experience, it wasn’t nearly as big an issue as they thought. In fact, they’ve discovered they can build right under the track.”

The streetcar track, which is 10 feet wide, only needs two feet of clearance on the interior-facing side of each of its double rails, she adds. That leaves six feet of space between the rails to locate a manhole.

Typical construction involves installing a concrete slab for the track, and placing a rubber casing under the rails. Also, rubber sheets are sometimes used above water lines to help prevent electrical shorts.

“In one of the subsequent phases, we have a gas line right under the track, with no problem,” Gustafson says.

Perhaps more importantly, the Portland project only was responsible for paying to relocate publicly owned utility lines. The bill to move privately owned lines was paid by the companies themselves.

The experience in Seattle has been similar.

“We have a good relationship with utility providers here, some of which are city-owned utilities and some of which are private,” says Ethan Melone, a Seattle Department of Transportation spokesman. “In our situation, there are very clear state laws and city ordinances that state transportation is the primary use of the right-of-way and utilities need to relocate at their own expense, if necessary, for a transportation project.

“That said, we work closely with the utilities to minimize the extent of relocation that is necessary,” Melone adds. “In the case of city-owned utilities, the city sometimes elects to include some of the relocation cost in the project budget. (But) private utilities relocate at their own expense.”

Seattle also is more flexible on how much distance is required between the tracks and utility lines.

“We have some instances where a manhole for a sewer or telecommunications is located within or adjacent to the track-way, as their access needs are more limited, so keeping their facilities in place may make more sense,” Melone says.

“Some utilities have concerns about the potential effects of stray electrical current on metal pipes, though this can be mitigated in various ways,” he adds. “Generally, the idea of a ‘minimum clearance requirement’ is somewhat arbitrary if applied generically, but the parties should be able to arrive at an appropriate clearance or access provisions if they work together on the specific characteristics and access requirements for the utility.”

A provision in Ohio law, however, could help Duke’s position in the standoff here.

Generally, utilities aren’t required to reimburse other utilities in Ohio, and state law includes some types of public transportation as a utility. (That explains the unusual wording in Janson’s letter to city officials.)

Ohio law includes the following as a public utility: “A motor transportation company, when engaged in the business of carrying and transporting persons or property or the business of providing or furnishing such transportation service, for hire, in or by motor-propelled vehicles of any kind, including trailers, for the public in general, over any public street, road, or highway in this state.”

Still, there is disagreement about whether this applies to streetcars.

Cincinnati’s streetcar project is anticipated to operate seven days a week, 365 days a year. It will, however, shut down for about six hours each night so routine maintenance for existing utilities can be performed.

Duke counters that some repairs, like replacing a vault box, could take weeks or even months. “There’s some work that simply cannot be completed in a six-hour period,” Walls says.

The track slab will be an 8.5-feet wide and 1.5-feet thick reinforced concrete slab at the same level with existing pavement with a continuous double rail on top. The slab is designed so that it will span over a 10-foot trench, with utilities located underneath.

The streetcars will operate within regular traffic and pull alongside curbs at specified stops — about every two blocks — for passengers to get on and off.

Additionally, a single, overhead electrical wire will power the streetcars, although an alternate design for a battery-operated streetcar also is being considered as a backup.

The streetcar project’s primary purpose is as an economic development tool, city officials say, by spurring investment in the nearly 500 vacant and dilapidated properties along its route.

Modern streetcars are becoming especially popular in older cities like Cincinnati, which have narrow streets and short blocks. That’s because they don’t require that the entire street be torn up and rebuilt, which often is required with wider, taller light rail trains.

Streetcars “play it as it lies,” as supporters like to say, because they follow the contours of the existing street and require only about 12 inches of pavement removal — making it a less invasive and cheaper form of rail transit.

But utility relocation is the latest battleground for mass transit opponents who have already been defeated twice in their attempts to stop the project via the ballot box.

In November 2011, voters rejected a charter amendment that would’ve prohibited city officials from spending money on anything related to preparing any type of passenger rail transit through Dec. 31, 2020. It was rejected 52-48 percent.

In November 2009, voters rejected a charter amendment that would’ve required a public vote before taxpayer money was used for any rail-related project within Cincinnati. It was rejected 56-44 percent.

Both ballot referendums were pushed by the Coalition Opposed to Additional Spending and Taxes (COAST) and the NAACP’s local chapter. COAST dislikes publicly funded mass transit projects while the local NAACP believed the city should spend its limited resources on other neighborhood projects. (Oddly, the NAACP’s national office approved a resolution in 2009 supporting passenger rail projects, including streetcars, as a way to help low-income neighborhoods.)

Now, COAST leader Chris Finney is preparing a lawsuit that challenges the city’s authority to build the streetcar system above Hamilton County’s sewer lines. Finney alleges the plan violates the county’s property rights and is an abuse of the city’s corporate powers.

But the city of Cincinnati owns the rights-of-way within city limits — not Hamilton County and not Duke Energy. Utilities don’t have a property right to operate within the rights-of-way on city streets, Cincinnati officials have said. In fact, Duke uses the area below public streets on a permit basis.

City officials declined to speculate on Duke’s motives for throwing a monkey wrench into the project.

Some streetcar supporters and business leaders, though, said privately they believe Duke knows it wouldn’t be successful if it submitted a cost recovery request to state utility regulators for the utility line relocation. For example, when Duke sought to recover $28.5 million from customers for expenses related to the 2008 windstorm, regulators ultimately only approved $14.1 million — or less than 50 percent.

It’s not like Duke can’t afford the relocation cost. The firm’s net income was $1.36 billion in 2008; $1 billion in 2009; and $1.32 billion in 2010.

Further, local residential rates increased 37 percent for Duke Energy customers during the past five years. The company blames the rate increases on factors like fuel and environmental cleanup costs, but it also found the money to keep giving raises to its CEO, James E. Rogers.

Rogers made $8.8 million in 2010, an increase of $1.9 million — or 27 percent — from the previous year, according to documents filed with the Securities and Exchange Commission. His compensation includes about $1.6 million in performance-based stock options, along with $420,000 in perks that include personal use of corporate jets and reimbursement of legal fees incurred while negotiating his contract.

Moreover, Duke isn’t exactly reticent about potentially chipping in millions of dollars to bring the Democratic National Convention to Charlotte in September.

Rogers is leading the fundraising for the convention, and he has convinced Duke to guarantee a $10 million line of credit for the event. A Duke spokesman told The Charlotte Observer that stockholders, not ratepayers, would be liable if the convention’s host committee defaults.

“The DNC asked, and we were able to provide it,” Duke spokesman Tom Williams told the newspaper. “We stepped in to do it as a way to land this convention and support this community. When our region is successful, Duke is more successful.”

For Cincinnati officials, that civic-minded sentiment is ringing hollow right about now. ©

 
 
 
 

 

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