City, SCE&G to use ‘franchise fee’ to move power lines beneath Boundary Street

in Community by

As construction nears on the $30 million Boundary Street improvement project, SCE&G will begin moving its power lines underground, an effort to be paid in part by the affected utility customers through a “special fee franchise district” along the roadway.

SCE&G agreed to advance the total costs of the power line project — estimated at $2.9 million — and to be reimbursed by the 7 percent Special Franchise Fee District as it is collected. Beaufort City Council is scheduled to consider the arrangement at a special meeting this Thursday at City Hall.

The fee will affect about 160 utility customers located roughly from Country Inn & Suites at Boundary and Neil Road to the Boundary Street intersection with Ribaut Road by City Hall.

The special purpose fee won’t be added to utility bills by SCE&G until after the underground conduit for power lines is completed, estimated to be about six months to 12 months away.

Major construction along Boundary Street is expected to begin in early July after the primary contracts are awarded by Beaufort County.

“This is the best and least costly way to eliminate the unsightly and potentially dangerous overhead power lines along the Boundary Street right of way,” Beaufort Mayor Billy Keyserling said. “It’s going to be the first of many pieces that will beautify the western entrance to the city.”

Frequently Asked Questions 

SCE&G Special Franchise Fee District for sections of Boundary Street Corridor 

May 2014

1. What is the SCE&G Special Franchise Fee District? 

As construction nears on the $30 million Boundary Street Improvement Project, SCE&G will begin moving its power lines underground along that stretch of roadway as required by the City. This will be paid for, in part, by utility customers in that area. This is called the “special franchise fee district.”

SCE&G is paying the upfront costs of the power line project – estimated at $2.9 million – and will be reimbursed by the 7 percent Special Franchise Fee District as it is collected. The fee is allowed under state law and under the franchise agreement between SCE&G and the City of Beaufort. A similar approach was used along Port Republic Street when the city and utilities made streetscape improvements.

2. Who has to pay the Special Franchise Fee District? 

The fee will affect approximately 160 utility customers located along Boundary Street, roughly from Country Inn & Suites at Boundary and Neil Road to the Boundary Street intersection with Ribaut Road by the Beaufort County Government Center and City Hall.

3. When does the added 7 percent fee begin and end? 

The fee won’t be added to utility bills by SCE&G until after the underground conduit for power lines is completed, estimated to be about six months to 12 months away. The fee will end when the amount initially advanced by SCE&G is repaid, but no longer than 10 years.

Major construction along Boundary Street is expected to begin in July after the primary contracts are awarded by Beaufort County.

4. Why is this special fee approach being used? 

The special franchise fee district places a portion of the project cost on those customers who will receive the greatest benefit from having the utility lines placed underground – benefits that potentially include higher value to the properties, better utility service and a more appealing look to customers and shoppers.

“This is the best and least costly way to eliminate the unsightly and potentially dangerous overhead power lines along the Boundary Street right-of-way,” Beaufort Mayor Billy Keyserling said. “It’s going to be the first of many pieces that will beautify the western entrance to the City.”

5. How big is the Boundary Street Corridor Improvement project? 

Building a better Beaufort is the goal of a $30 million investment in Boundary Street to create a more scenic entry to the city, provide better commercial and retail locations, and improve traffic conditions.

The project includes realigning the intersection of SC 170 and US 21 and is expected to last about three years. The Boundary Street Corridor work is part of a larger effort to reconfigure Beaufort from near the Marine Corps Air Station to annexed areas of Lady’s Island, creating a unified and connected neighborhood designed for people, not just cars.

As part of the Boundary Street improvements, City Council requires that SCE&G remove its power poles along Boundary Street, and relocate its overhead power lines into an underground duct bank to be provided by the roadway contractor.

Underground utilities not only improve the appearance of an area, but also are safer for motorists and are less likely to be damaged during hurricanes, thunderstorms or the rare sleet or snow.

In December 2011, the federal Department of Transportation announced that Beaufort had earned a $12.6 million federal DOT grant to jumpstart Beaufort’s Boundary Street Master Plan with major roadway improvements at the intersection of highways SC 170 and US 21.

About $13.7 million in local money from the voter-approved penny sales tax originally designated for Beaufort road projects will serve as match funding for the federal grant.

6. If SCE&G is charging the fee, why is the City involved? 

In 1999 Beaufort entered into a Franchise Agreement with SCE&G to secure electric utilities within the City of Beaufort. That agreement allows City Council to designate a special franchise fee district, not to exceed 7 percent or to be in play longer than 10 years. The fee is allowed only for projects affecting more than 25 existing SCE&G customers.

7. What’s next? 

Beaufort County officials anticipate awarding construction contracts this spring, with work starting in July 2014. The bulk of the work will take about 18 months.

“Now that we are kicking off the actual construction part of this work, our city residents, the thousands of nearby residents who drive through Beaufort each day, and our visitors will all notice changes and improvements,” Mayor Billy Keyserling said.

“We hope people will pardon our progress,” he said. “Anytime you have a project of this scope, you can expect there to be some traffic delays. We’ll do our best to keep the community informed as the work unfolds.”

For more information: Please visit www.cityofbeaufort.org and click on Projects, then Boundary Street.