Duke Energy's approval and cooperation was considered to be essential in advancing the highly anticipated Cincinnati streetcar project, and Wednesday the company announced it isn't willing to cooperate.
In a letter to Mayor Mark Mallory dated Feb. 8, Ohio and Kentucky Duke Energy President Julie Janson stated that Duke changed its mind after a year and a half of negotiations and that it wouldn't cooperate with the city's requests that Duke move utility lines downtown to make way for the streetcar's tracks. According to Janson's letter, the lines must be moved a minimum of eight feet from the edge of the streetcar before any progress can be made in the plan's implementation. Duke estimates that the relocation and replacement of the infrastructure would cost somewhere around $18.7 million, but City Manager Milton Dohoney said that estimate hadn't been verified by anyone else.
According to Janson's letter, "the company continues to support the city's effort to construct a streetcar," but Duke admits it won't even consider moving its lines until the city pledges to cover every penny of the $18.7 million investment.
Duke's opposition comes at an interesting time: The city of Cincinnati recently decided to send out requests for proposals (RFPs) to new energy suppliers in hopes of obtaining lower rates and greener emissions in Cincinnati. Read more about that here.
If the city decides to choose another provider and move forward with its energy aggregation plan, that could mean Duke Energy could lose a good chunk of its customer base — a slice of its 685,000 electric customers and 400,000 gas customers in Ohio alone.
As of December 31, 2010, Duke Energy's total assets were $59 billion.
Despite Duke's resistance on relocating the utility lines, the mayor doesn't think it poses an insurmountable problem.
“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. "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. I am calling on Duke Energy to be reasonable and work with the city on a plan that will be best for both citizens and their customers."
Mallory 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. These issues will be resolved one way or another, just as we have resolved previous issues facing the project. The best thing for everyone involved is if Duke is a constructive part of that resolution.”