On Dec. 11, in my capacity as chair of the Committee on Finance and Revenue, I held a committee vote on a bill to place underground a substantial volume of the District’s power lines. In 2012, as a response to years of major storms and the recent derecho, a Power Line Undergrounding Task Force was established. The purpose of the task force was to pool the resources available in the District to produce an analysis of the technical feasibility and reliability implications of undergrounding the District’s power lines. The bill I moved on the 11th is based on the task force recommendations.
This legislation would approve a program of up to $1 billion in undergrounding work, to be funded by a combination of District revenue bonds, Pepco investments and funding provided by the District as part of the DDOT capital improvement program.
Undergrounding these strategic portions of our power system will result in enhanced reliability. In addition, I am excited about the opportunities this project will create for the employment of District residents. Pepco will work with the Department of Small and Local Business Development on achieving Certified Business Enterprise (CBE) and Small Business Enterprise (SBE) participation as a meaningful part of this project. A preliminary analysis suggested that approximately $625 million of the project would be eligible for CBE participation.
The default CBE projections start out with goals of 35% CBE and 20% SBE participation. These grow over the life of the project to 41% and 25%, respectively, by the end of the seven-year project. For the overall project, CBE participation was initially projected at 38%, an average of $33.93 million per year, and SBE participation at 23%, an average of $20.54 million per year. Given the expected time frame of the project, our local businesses will have the opportunity to further develop their capacity to perform an increasing volume of the work.
These numbers sound pretty good, but I believe the legislation should contain stronger provisions relating to local hiring. The bill I moved would set a goal of at least 51% of related contracts and jobs to be awarded to District businesses and residents, with reporting requirements to provide accountability.
I am proud of my record of leveraging large city projects into job opportunities for our residents. Projects such as the Convention Center Hotel will result in at least 600 permanent jobs for District residents, and the partnership with our hospitality high school virtually ensures a job for every resident who graduates. In a similar way, awarding undergrounding contracts to District businesses and jobs to District residents not only gives them employment opportunities today, but provides longer-term career options going forward.