Streetcar project is entwined with utility implications

The City of Milwaukee’s proposed downtown streetcar project is moving forward with design and engineering, despite objections over the cost of moving utilities to make room for the line.

The Wisconsin Public Service Commission is currently evaluating whether the City of Milwaukee can use its police powers to build a streetcar, said Kristin Ruesch, communication director for the PSC. While police powers have traditionally been applied to street improvements to serve the public good, the PSC’s commissioners are determining whether that power extends to streetcars.

“Can the city make this decision and say that it has a benefit to the public?” Ruesch said. “If it does, they could ask utilities, and by extension their ratepayers, to cover the cost of moving the utility infrastructure.”

If the streetcar construction is not an extension of policing power, the city – and by extension, its taxpayers – would pick up the cost. That would be a smaller pool of payers, as opposed to all utility customers served by companies with lines under the streets.

The PSC will hold an evidentiary hearing with the parties involved – concerned ratepayers, telecommunications companies, utility companies and the city – in early 2013 to assist in its final decision, she said.

“PSC’s role isn’t really to say whether or not the city can go ahead with the streetcar or not,” Ruesch said. “Our only role is to determine how much of the costs of utility relocation would be picked up by the ratepayers.”

The utility relocation could cost more than $50 million, she said.

Businesses using steam to heat downtown buildings may pay a substantial amount to move steam tunnels as part of the project, said Wisconsin Energy CEO Gale Klappa.

If costs are allotted to utilities, there are 1 million gas customers and 1.1 million electric customers throughout the state of Wisconsin and the upper peninsula of Michigan that could share the cost of electric and gas line changes, but steam customers are a much smaller group of 450 buildings, he said.

“The majority of costs that we would incur are actually for the relocation of the steam tunnels,” Klappa said. “The customer base that would have to eat that cost is downtown Milwaukee. My big concern is the cost and the fair allocation of the cost.”

This rendering shows the proposed streetcar planned for downtown Milwaukee.

The City of Milwaukee is looking for the same information as the PSC at this point, and it’s not clear whether the project would go forward, no matter what decision is made, said Jeff Polenske, city engineer.

Last summer, Milwaukee brought on an owner’s representative, who will assist in managing the project through its remaining phases of development and construction, Polenske said.

About 30 percent of the design is complete right now, and the Common Council has asked to see the project again when it is at 60 percent of design, including total project cost, a more detailed overview and the potential effect on utilities, Polenske said.

Polenske and his team will be tasked with answering the question: “Do we still have a project that fits the $64 million budget that we have and what are the utility impacts?” he said.

The streetcar line, as it is currently proposed, would run a two-mile route from the Milwaukee Intermodal Station east along St. Paul Avenue, north up Broadway Street, east on Wells Street, north on Van Buren Street and then east on Ogden Avenue. It would connect the Historic Third Ward to the city’s east side.

The city currently has $54.9 million in federal funds and would need $9.7 million from local sources to complete the initial route, Polenske said. Later, another 1.5 miles could be added with additional funding.

“The more that this project becomes a reality and the more development we do on the project, it just becomes an easier project to meet the criteria that those (funding) programs are looking for,” he said.

The initial ridership for the two-mile route is expected to be 600,000 riders in the first year and 700,000 after 15 years. Based on studies of other cities with streetcars, the new transportation option is expected to draw some drivers into public transit and, as a result, also boost usage of the Milwaukee County Transit System, Polenske said.

City engineers are investigating the possibility of splitting the line between Broadway and Milwaukee streets, with the southbound track on Broadway and the northbound track on Milwaukee. This would minimize utility movement costs, Polenske said.

“There’s a formal consideration that we have to go through to obviously make sure that that’s a feasible option,” he said.

The track would take about two years to build and would be completed in segments to minimize the effect on downtown streets, Polenske said.

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