BG plans electric rate hikes
Written by HAROLD BROWN Sentinel City Editor
Tuesday, 26 November 2013 09:41
Most customers of Bowling Green's municipal electric system can expect annual rate increases in the range of 5 percent for the next several years.
Rising power supply costs, continuing needs for capital improvements and rising operation and maintenance costs were cited in an electric rate plan review presented Monday by Don Grunenmeyer, president of Sawvel and Associates. The firm has been performing similar work for city utility operations for many years. The last study, completed in 2008, resulted in a series of electric rate hikes that were completed in 2012.
"This is a healthy thing to do because costs do change over time," Grunenmeyer said.
Since the 2008 study, the city has been moving away from buying 81 percent of its power on the open market to 38 percent in 2013 and plans to reach 13 percent in 2016.
Director of Utilities Brian O'Connell told the Board of Public Utilities that moving away from the open market has been viewed as a way to control price spikes.
The BPU took no official action Monday, but reached a consensus that Sawvel should complete a rate levelization plan that will spread the costs over many years.
Based on preliminary information, the average residential customer using 600 kilowatt hours of electricity a month would see their bill increase from $74 to $77, effective March 1. Projections indicate that same amount of consumption would rise to $88 by 2018.
Five-percent increases are also projected for general service and general service demand customers. The existing large general service category has been broken into two categories, medium general service and large general service. The increase for customers in the new medium general service would be 4 percent and in the new large general service would be 2.1 percent.
The large power category customers, which number about 20, Gruenemeyer said, would see a decline of 2.5 percent in the first year.
"This is not the final chart. We need to do some more study," Grunenmeyer said.
The BPU was told to expect final numbers for its Dec. 9 meeting.
Gruenenmeyer said that by 2016 the city will be getting 36 percent of its power from hydroelectric plants. That total is now 14 percent, as it has been since 1999 when the Belleville plant on the Ohio River went into service. The city is a partner in four more hydro plants on the Ohio river that are to be in service by 2016. The city will also continue to get three percent of its power from the New York Power Authority, via Niagara Falls.
"Hydro power is going to cost more (than coal power)," Grenenmeyer said.
One percent of the city's power needs comes from the wind turbines at the Wood County Landfill. O'Connell said the debt on the turbines will be paid off in 2015, lowering the cost of that power to about four cents per kwh, from about 10 cents per kwh today.
The board also:
• Learned the July storm that demolished the electric transmission line along North Dunbridge Road, cost $277,107.95 to repair. O'Connell said the city has a $100,000 deductible on its insurance. He does not expect all of the costs will be admissible in the claim. The city has already paid crews from several cities $30,009.45 for their help. The BPU approved a $72,228.05 payment to Toledo Edison for its help.
• Authorized O'Connell to apply for a low-interest loan from the Ohio EPA/Ohio Water Development authority for a pump station upgrade at the water treatment plant on the Maumee River. O'Connell was also authorized to seek construction bids. Work on the project cannot begin before July 2014.