SMECO and U.S. Navy Sign Privatization Agreement

Southern Maryland Electric Cooperative (SMECO) and the U.S. Navy have signed an agreement to privatize Naval Support Facility (NSF) Indian Head to include main base Indian Head and the Stump Neck Annex. In the case of military bases, privatization means that a public utility takes over ownership and the operation of the facility’s electric system for a specified length of time. SMECO will own, operate, and maintain NSF Indian Head’s electric system for 50 years beginning October 2024.

The Naval Support Facility in Indian Head was founded in 1890 as the Navy’s first established presence in Southern Maryland. It now employs more than 1,900 people and serves all branches of the United States military through scientific and response-force missions.

“Receiving the final agreement was a lengthy process and we are honored to have been selected. Our local military facilities are a large part of our local economy and some of the largest local employers for Southern Maryland residents. They also serve as an asset to our national safety,” according to Sonja M. Cox, SMECO president and CEO. “We signed an agreement to privatize three other local military facilities in 2009—the Patuxent River Naval Air Station in Lexington Park, the Webster Field Annex in St. Inigoes, and the Navy Recreation Center in Solomons. Being awarded the contract to operate and maintain the main base in Indian Head and the Stump Neck Annex is another wonderful opportunity that will benefit both SMECO and the Navy.”

The final award document was executed on December 12, 2023, which begins the transition period scheduled to continue through October 11, 2024. During the transition period, SMECO will perform key tasks before taking over operations. Key tasks include completion of a joint inventory of existing electric system assets, initial system inspections, building a dedicated support team, and mapping of the system.

On October 12, 2024, SMECO expects to take ownership of the electric utilities at main base Indian Head and the Stump Neck Annex, pending completion of contractual obligations during the transition period. Privatization efforts will include improvements to the existing infrastructure, including installation of 775 meters, substation and distribution improvements, and extensive vegetation management.

“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,” according to Roger Schneider, senior vice president of Engineering and Operations. “The cooperative was able to improve the system reliability and resiliency at NSF in 2012 when we acquired a sub-transmission feed to the main base at Indian Head. That 69-kilovolt line 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.”