Wednesday, May 26th, 2021
City electric to give customers 1-time credit
Utility overcharged for years, has surplus
By William Kincaid
CELINA - Celina electricity customers will see a one-time substantial credit on their June bill for May usage as part of a multifaceted plan to reduce a $12 million collection surplus. An overall reduction in electric rates by Sept. 1 also is part of the plan.
The city electricity utility in June will issue bill credits totaling $1 million to all customers. The credit is about 5 cents a kilowatt hour. The average monthly residential bill of 750 kilowatt hours will drop from $94 to $53 - for one month only.
"It's a one-time credit," mayor Jeff Hazel stressed at this week's utility committee meeting.
On top of that, the bill will reflect a nominal Energy Acquisition Adjustment credit of a quarter of a cent per kilowatt hour. The EAA reflects the extra costs of providing power to city customers, whether because of increasing supply, transmission or other expenses. The EAA credit will extend at least through the end of the year, according to city officials.
Hazel cited myriad reasons for the surplus that accrued over the last few few years but insisted city officials aim to return some of it to customers via bill credits and rate reductions.
"It wasn't because we tried to charge people more," he said. "When we had the dairy farm come online, that was never part of the plan. Market rates went down. That was never projected at the time. We did not have the … shutdown during COVID that we anticipated."
To put the surplus amount in context, Hazel said the city spends up to $20 million just on power supply.
"So it is a very large number that goes into there," he said. "Let's figure out how do we not just get (the surplus) down but how do we put it back down while maintaining … for operations and maintenance."
Councilors met last month with Findlay-based energy consultants Sawvel and Associates Inc.
Sawvel President Don Gruenemeyer and engineer Andy Harriger presented councilors with the proposed rate changes, citing a decrease in power supply costs and a healthy leftover fund balance from 2020.
A 2017 rate study by Sawvel and Associates projected power costs in 2021 would cost $82.30 megawatts per hour sold, totaling nearly $20 million if 240,960 megawatts per hour were sold, according to their presentation.
However, the per hour megawatt cost has decreased by $5, and 2021 power costs now are projected to cost $77.30 megawatts per hour sold, or less than $18.6 million if 240,382 megawatts per hour are sold. The projected costs would be $1.4 million less than initially estimated.
Part of the city's multifaceted plan to reduce the $12 million collection surplus also involves lowering customer electric rates by Sept. 1.
With the newly revised figures, electricity rates could be cut across the board, with residential rates to drop 4.1%; small commercial non-demand, 9.8%; small commercial demand, 6.9%; large commercial, 16.9%; large power secondary, 9.1%; large power primary, 8.9%; and industrial substation, 1.1%, councilors learned.
City officials are working on new rate structures to be presented to council members in the next month or so.
They want to have the new rates in place by Sept. 1.
