Southern Maryland Electric Cooperative will take over the electric system at the Naval Support Facility in Indian Head, Maryland, this fall after signing a significant contract seen as demonstrating the “great value” of the military working with electric co-ops.
The 50-year agreement with the U.S. Navy allows the Hughesville co-op to own and operate the electricity service at the main base and the Stump Neck Annex, which includes substations, power lines and poles.
“This contract is a big win because new utility privatization contracts are very minimal nowadays and SMECO went up against some really tough competition and came out on the other side,” said Lauren Khair, NRECA’s director of business transformation.
“The Navy’s decision to work with SMECO tells us that they find great value in the service cooperatives have to offer and are willing to go into a long-term contract because of it.”
The Indian Head base, one of several NSFs around the world, employs more than 1,900 people and serves all branches of the military with research and development and operational support.
“Military facilities are a large part of our local economy—and some of the largest local employers for Southern Maryland residents—and serve as an asset to our national safety,” SMECO President and CEO Sonja M. Cox said.
“Being awarded the contract to operate and maintain the main base in Indian Head and the Stump Neck Annex is a wonderful opportunity that will benefit both SMECO and the Navy.”
Until it takes full ownership on Oct. 12, the co-op will inventory existing electric system assets and conduct initial system inspections, map the system and build a dedicated support team.
SMECO said it also plans to make improvements to the NSF’s substation and distribution infrastructure, install 775 meters and conduct extensive vegetation management.
Over 125 cooperatives serve military bases across the country. “This is another example of co-ops exploring new and innovative energy service contracts for large commercial and industrial members like a military base to the benefit of their member and the overall membership,” said Khair.
SMECO is no stranger to the maintenance and reliability needs of the NSF, which was established about 130 years ago. In 2012, the co-op acquired a sub-transmission feed to the main base at Indian Head that dated back to the mid-1940s and was in significant disrepair.
“We made major improvements to the line while maintaining service to the facility throughout the upgrade,” said Roger Schneider, SMECO senior vice president of engineering and operations. “SMECO has a proven reputation for our system reliability, disaster and storm response, customer service and affordable rates, which will benefit the facilities in Indian Head.”
SMECO has been privatizing military facilities in Maryland since 2009, when it entered agreements to own and operate the electricity systems at the Patuxent River Naval Air Station in Lexington Park, the Webster Field Annex in St. Inigoes and the Navy Recreation Center in Solomons.
Cathy Cash is a staff writer for NRECA.