Tuesday, March 1st, 2016
St. Marys electric rates may increase
Higher monthly fee eyed
By Jared Mauch
ST. MARYS - Electric customers could see increased service rates starting in August.
The city's electric committee met with John Courtney of Courtney & Associates accounting firm to discuss the possible new rates, which will be submitted as an ordinance for council's consideration. Electric rates in St. Marys have not been changed since 1981, safety service director Greg Foxhoven said this morning.
The rates would increase on or after the Aug. 10 billing date, according to the draft ordinance. Some electric costumers have later billing dates in August, utility office supervisor Carol Lengrich said.
The monthly customer charge for residential, commercial, large power and industrial rate schedules is $6.75, Foxhoven said. The charge would increase according to the new rate schedules.
Residential customers would pay a $10 per month charge and face three tiers for energy charges. The first 500 kilowatt-hours would be billed at 11 cents per kwh. The next 1,100 kilowatt-hours used would cost 10 cents per kwh, and any use over 1,600 kwh would cost 9 cents per kwh, according to the ordinance.
Commercial single-phase users also would see a $10 monthly customer charge, and commercial 3-phase users would pay a $15 monthly charge.
All commercial users would see the same energy charges for kilowatt hours. The first 500 kwh would be 14 cents per kwh. The next 1,500 kwh would be 12.5 cents per kwh, and any usage over 2,000 kwh would be 12 cents per kwh.
Large power customers who establish a minimum demand of 500 kilowatts would have a customer charge of $50 each month, a demand charge of $15 per kilowatt and an energy charge of 5 cents per kwh, according to the ordinance.
This billing plan would be suitable for users such as Joint Township District Memorial Hospital, Setex and Omni Manufacturing, Courtney said.
Courtney suggested the three industrial power users - AAP, St. Marys Foundry and Continental Tire - be on the industrial power rate.
The rate would be for users who have a minimum demand of 3,000 kilowatts and would have a customer charge of $100 per month, a demand charge of $20 per kilowatt and an energy charge of 4 cents per kwh, according to the proposal.
The large and industrial power rates would include an economic development discount for five years for potential companies coming into the city. The discount would be a 1 cent reduction per kilowatt-hour of energy in excess of the customer's base monthly use. The discount is an incentive for new companies coming into the city or new loads allowing existing companies to expand, Courtney said.
"We've been asked to take a look at something you can do for new loads, new large loads that come into the community or existing customers that have an increase in their load," he said.
New customers would have no base charge and would save a penny per all kwh use, Courtney said.
Utility officials would look at the past year's use and determine an average for existing customers who add on a new load The average would act as the base monthly use, he said.
The rate changes would help bolster the city's electric fund, which receives only 25 percent of the existing kilowatt-hour tax. The tax collects about $820,000 each year. Council members voted last year to put 75 percent of the annual tax revenue into the general fund instead of the electric fund as it had in the past.
Foxhoven has said the change would add about $51,000 per month for the general fund.
The changes also would help fund distribution upgrades at the Spokeworks Substation near Cleveland Street in the northeast section of the city.
In creating the new schedule, Courtney & Associates consolidated the city's 14 existing rate schedules into the four outlined during Monday's committee meeting. Having fewer schedules will make billing easier to manage, Foxhoven said.
Council president Jim Harris said the ordinance should receive three readings, with the first at the March 14 council meeting.
The ordinance may be approved in April and go into effect in May. However, the rates would not change until August, Foxhoven said.
