Electric rate hike in works for BG PDF Print E-mail
Written by HAROLD BROWN Sentinel City Editor   
Thursday, 19 December 2013 11:12
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Bowling Green Municipal Electric rates will increase an average of five percent for most customers each of the next four years following action late Wednesday afternoon by the BG Board of Public Utilities.
The new rate schedule takes effect March 1, 2014, with adjustments planned on the same date in 2015, 2016 and 2017.
Director of Utilities Brian O'Connell said the rate hikes are the result of a long-term decision to switch from purchasing power on the open wholesale market to relying on fixed assets of which the city is a partial owner. Among the fixed assets are the Prairie States coal plant in Illinois and four hydro-electric plants on the Ohio River that will go on line in the next two years. Power from the Prairie States plant will cost the city $73.66 per megawatt hour, while power from the hydro plants will cost the city an estimated $100 per megawatt hour. O'Connell said another cost figuring into the hike is a two-year spike in the cost of transmitting power on the grid.
Residential customers will see their bills increase 5.2 percent March 1. A customer using 600 kilowatt hours per month, now paying $74, will see the bill increase to $77. By 2018 the cost is projected to be $87 for the same usage. The 5.2 percent figure is up from the 5 percent suggested in a BPU session in late November.
General Service customers, which include churches, retail businesses and smaller industries, will see a five percent rate increase.
The city's largest power customers will see their rates drop about one percent.  
The rate recommendations are the result of a cost-of-service study completed by Sawvel and Associates Inc. One of the purposes of the study was to develop rates "fair and equitable to all levels of service."
The firm conducted a similar study for the city about five years ago.
The BPU also approved a rate-levelization program with AMP-Ohio, which will help finance the power costs over the long term. While the BPU has the final say on rates, the levelization financing will have to be approved by BG City Council.
In 2010 the city purchased 80 percent of its electricity needs on the open market. By 2016 that figure will drop to 13 percent. Roughly 50 percent will come from Prairie States, 11 percent from the Belleville hydro plant, 22 percent from the new hydro projects, three percent from the New York Power Authority (Niagara Falls) and one percent from the four wind turbines at the Wood County Landfill.  That means BG will be getting about 37 percent of its power from renewable energy sources.
 

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