Mayor warns of power rate hike; Marietta’s Tumlin says 20% increase over 5 years ‘would be realistic’
by Jon Gillooly
April 02, 2013 01:20 AM | 2652 views | 8 8 comments | 10 10 recommendations | email to a friend | print
Marietta Mayor Steve Tumlin said city residents should brace for a 4 percent annual electric rate increase for the next five years.

The increases are a result of the city having more power than it can use, a depressed wholesale market in which to sell off excess power, and increasing environmental regulations, he said.

“You hate to tell folks things are going up, but I think it would be realistic for them to expect 4 percent raises over the next five years,” Tumlin said. “Whether or not that will pass City Council every December or the (city-owned utility, Marietta Power and Water) I don’t know, but that 4 percent has got to come from somewhere.”

The city has a safety net that extends until 2018 in the form of municipal competitive trust credits, said Bob Lewis, Marietta Power’s general manager.

“Originally bond reserve funds that Marietta took out were required to pay as part of the original financing of the power plants, and these are all coming back to Marietta to be used as an offset of the power cost,” Lewis said.

Those credits average about $10 million a year, but that revenue ends in 2018.

At that time, if the city has not taken any action, such as increasing rates or selling off some of its power, it would require a 20 percent electric rate increase to balance the budget, Tumlin said.

“If we went up 20 percent in one year, that would be devastating to our community,” Tumlin said. “But if we’re consistent, give people notice, are forthright, that’s all I think we can ask. I mean, I hate it. I’m going to pay it myself. My business is going to pay it.”

The city is looking at other options, such as finding a profitable way to sell off its excess energy. One proposal is to opt out of its contract with the Southeastern Power Administration.

“We think we can save about $3.5 million a year if we opt out of that contract, but that’s one of those things that’s forever and ever,” Lewis said. “You’re either out or in, and once you’re out, you’re out altogether.”

Lewis is also studying the idea of selling off 20 of the 53 megawatts the city owns in the two original nuclear reactors at Plant Vogtle. Exactly what amount that would bring is unknown and would have to be studied, Lewis said.

There are a number of reasons why Marietta Power is in the position that it is. In addition to the federal regulations and depressed wholesale energy market, the city has razed its high density federal housing projects, which used large quantities of electricity, Lewis said. Development meant to replace it has been put on hold due to the recession.

“There’s been some 1700, 1800 units that have been torn down in Marietta over the last four or five years, and none of those places have been rebuilt,” Lewis said.

Tumlin said a council vote to raise rates would take place in December.
Comments
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Hows About This
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April 04, 2013
Hows about we sell off Marietta "Property Taxes By Proxy" Power

If you ever wondered why we have this "Tax By Proxy" entity Marietta Power as a city holding, it's main purpose is to attract landlords to the city by displacing some property tax directly onto the tenants via the utility bill: Tenants pay their own utility bills, so this proxy property tax trick allows for lower advertised rental rates. The tenants pays the property tax directly to the city on their power bill rather than writing it into the rent check given to the landlord who then pays (some of) the property tax.

Marietta's city leaders talk and talk and talk about getting rid of the rental properties, all the while shifting property taxes over to the Tax By Proxy entity Marietta Power through regular increases in power rates.

We all know you guys are talking out of both sides of your mouths about all the rentals!

If we didn't really want the rentals, our Tax By Proxy entities (Power, Water Garbage and Recycling all conveniently together on one bill) would be auctioned off.

Can't we just admit the renters pay our way?
Cobb Resident
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April 03, 2013
Interesting! I understand market pressures, but the customer's income is VERY depressed and real wages are going down. Where does that fit in the equation?
anonymous
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April 03, 2013
Mayor Tumlin: All of us citizens are not wealthy and "OM's" snobs like you. I live on a fixed income, retired & alone. Having my water, electric, cable & all other utilities rise yearly isn't just an inconvience. My home has been devalued to the point I can't sell & move to another location. Living in Marietta has turned into the getto for rich people, & I MEAN GETTO.

Your snobbery comments won't buy you any votes, remember that Mr. MAYOR!! Marietta needs to fix it's problems before taxing citizens to death.
Sell Marietta Power
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April 02, 2013
Makes no sense, if rates are not needed for five years why raise them now and what happens to the money collected between now and 2018? Please include your notes and calculations. And who made the deals to force us to buy too much electricity. Is someone being fired for this? This is a public utility we need to understand how this happened and what can be done to keep rates down. This reeks of other untility boondoggles like Marietta fiber which lost the city millions upon millions. Aren't these the same people?
Be Careful
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April 02, 2013
Wait, what????

Mayor...raising rates 20% would be devistating.

So you want to raise the rate 20%?

Why do you think raising it all at once or over 5 years makes a difference? The end result is we're paying more and more every year and are being hit with a 20% increase.

Time to start looking at solar for my house.
great news
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April 02, 2013
This is great news! My house is total electric and I already feel like I am living in an igloo in the Arctic! The bills are higher than they were last year and pretty soon, we can just light a fire in an old coffee can and try to keep warm.
Uben Comcassed
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April 02, 2013
We have too much supply, not enough demand, so prices are going UP?

Prices are going up 4% per year for 5 years, for a 20% increase? because of too much supply and not enough demand?

What is going on here? Was Marietta Power acquired by Marietta's monopoly cable provider even though cable is digital now and we could have 1000 cable providers on the same wire so there's no "need" for any monopoly, cast?

How about this, Tumlin: You shut down Comcast's monopoly so we have competition for the absolutely worthless product they sell called "Cable TV," and we'll all save so much money on TV that we can easily pay your increase in electricity rates I mean city property taxes I mean electricity rates I mean city property taxes I mean electricity rates I mean city property taxes I mean electricity rates I mean city property taxes I mean electricity rates I mean city property taxes I mean electricity rates I mean city property taxes I mean electricity rates I mean city property taxes I mean electricity rates I mean city property taxes I mean electricity rates
Totally agree!
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April 02, 2013
Amen to this!!
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