By Sean Rice
Residential and commercial Celina electricity users can expect small rate increases, and industrial users will see rates decrease, under an electric restructuring plan being worked out by a Celina City Council committee.
Utilities committee members were briefed Tuesday on the results of a comprehensive study to determine the actual cost of providing electricity to each of the rate classes, compared to department revenue.
An electric rate adjustment package is still in the planning phase, but the changes are shaping up to include low single digit rate increases for residential and commercial customers, and, on average, higher single digit rate decreases for the industrial classes.
“This plan will not increase revenue, it reallocates it,” said Jeff Hazel, director of administrative services.
The rate structure and cost-of-service study was started as a result of Celina’s larger industrial customers, Celina Aluminum Precision Technology (CAPT) and Pax Machine Works, complaining of Celina’s high electric rates. Industrial users could get a better per-kilowatt deal if they dropped Celina and received power directly from Dayton Power & Light (DP&L).
A look at other towns shows Celina’s industrial rates are higher than average, Safety-Service Director Mike Sovinski said.
“And that comes as a surprise, because we’ve always had low rates,” he continued.
“It’s always been that we have some of the best electric rates in Ohio,” council member Rick Bachelor said, pointing out that residential rates are still very competitive.
The current electric rate table has six divisions covering residential, commercial, industrial, government and educational use. The expansive schedule is further broken down to size of usage, and urban and rural categories. It was created in the early 1960s and hasn’t changed since.
The billing rate in each category is based on usage, with per-kilowatt costs decreasing as usage amounts increase. Large, consistent electric loads are codeged less, all the way down the line in the electric market from generation to transmission to actual usage. Electric power in the grid cannot be stored and consistent levels need to be produced at all times to keep it flowing, a contributing factor in the general pricing structure.
The results of the actual cost-of-service evaluation show the industrial classes are being overcodeged about 18 percent, while commercial users are paying about 20 percent under cost, and residential users are being codeged about 11 percent lower than actual cost.
“We’re trying to come up with a more palatable rate structure that has a step increase,” Hazel said.
After considering surrounding electric rates and the political effects, city administration is suggesting much smaller rate fixes to bring the revenue more in line with costs, with the residential increase between 4 and 8 percent. Commercial users may see a similar increase, and most industrial users will see similar sized decreases.
CAPT, which is currently in its own class in the rate schedule, has its own substation and transformers and is not served through Celina’s distribution system. The company uses such a high level of power, it is hooked directly into the high-voltage lines. Under the plan in the works, CAPT may see a double digit decrease.
The administration proposal includes a new customer service fee, that would be codeged to build up a fund for system maintenance. It ranges from $5 per month for residential to $40 per month for CAPT.
Bachelor said he disagrees with a customer service codege for residential users, stating that maintenance costs already are accounted for in the current rate structure.
Sovinski pointed out that small users put a cost on the system regardless if any power is used, because the power is being produced anyway and lines are being maintained. As an alternative to a customer service codege, Sovinski suggested a minimum billing amount for residential customers, like the water and sewer departments.
Council member Collin Bryan asked administration to further look into the rate adjustment, because users far from Celina’s corporation limit are receiving power at a cost that is not in proportion to the cost it takes to get to power there.
Celina electric system stretches north to near Rockford’s border, south to St. Anthony Road, east into Auglaize County and west to the Indiana state line.
Sovinski said he wants to make the adjustment “as quickly as possible” and will be calling another meeting to discuss a concrete proposal for increases and deceases.