As utility costs double, Air Force attorneys fight back

  • Published
  • By Jennifer McCabe
  • AFCEC Public Affairs
TYNDALL AIR FORCE BASE, Fla. --  The smart use of energy and water saves the Air Force money, but a decreasing demand has not overcome an increasing price. While facility energy use has decreased 37 percent since 1999, costs have increased 100 percent.

Fighting this trend keeps a team of utility litigation attorneys at the Air Force Civil Engineer Center busy. AFCEC's Utility Law Field Support Center, a branch of the Air Force Legal Operations Agency, consists of four attorneys and two paralegals. The team represents the Air Force before state public service commissions in an average of seven rate hearings a year.

In 2012, the ULFSC helped Air Force installations avoid paying an additional $4 million on annual utility bills. Total cost avoidance for 2013 is expected to be $9.6 million, pending final decisions by public service commissions in three states.

For example, in December 2013, the ULFSC intervened in an electric utility rate case involving Florida's Gulf Power Company. The parties reached a settlement that lowered the utility company's initial requested base rate increase from $90.8 million to $55 million. The settlement, approved by the Florida Public Service Commission, avoided a $1.7 million increase in utility costs for the Air Force and Navy, including Tyndall and Eglin Air Force Bases, Hurlburt Field and Naval Air Station Pensacola.

Approximately 15 percent of an installation's operating budget is spent on utility services per year, said ULFSC Chief Lt. Col. Gregg Fike.

"Since the tax dollars that are used to pay the utility bills for military installations come from the operations and maintenance budget, every utility rate increase that is avoided is another dollar that commanders can use towards fulfilling their installation's primary mission," said Fike.

The Government Services Agency, or GSA, delegates authority to the Department of Defense to represent federal interests at rate hearings. Responsibility for the various DOD installations is then divided between the Air Force, Army and Navy, depending on which is the largest power user within a utility's service territory. The Air Force is the lead for 31 utility companies across 19 states.

When a utility company files for an increase, the ULFSC analyzes the impact. If the increase is significant in dollar value or could possibly set a bad precedent, the Air Force will intervene before the state public utility commission, file discovery and testimony, and then litigate at the hearing with the other parties.

The Air Force is usually among a utility's largest customers.

"If we do not intervene in these rate cases and represent the interests of the federal government, then representatives of the other customer categories (such as residential and small commercial) may believe the federal government can shoulder the burden of the utility rate increases," said ULFSC Attorney Maj. Chris Thompson.

The Air Force spent more than $1 billion on facility energy last year.

"As federal customers, we bring a slightly different set of issues and concerns to the proceeding, which may differ from other large customers," said ULFSC Attorney Karen White. "Therefore, it's vitally important that we, and our counterparts in the other services, participate in these cases to represent our unique interests."

Thompson said he feels that the center's efforts are having an impact.

"At the end of the day, all of us in the ULFSC can look at our efforts and know that we are helping installations steward their precious operations and maintenance dollars wisely," said Thompson. "It's a great feeling, knowing we make a real difference to the Air Force."

For more information, contact AFCEC at 888-232-3721.