Energy costs predicted to rise for Marietta residents in 2014
by Rachel Miller
June 08, 2013 12:32 AM | 2080 views | 3 3 comments | 10 10 recommendations | email to a friend | print
From left, Marietta Board of Lights & Water Foreman Brad Wheeling operates a tractor hoe as operators Bryan Myers and Phillip Silva re-lay the sewer service at Kirkpatrick Drive and Columbia Drive in Marietta on Friday afternoon.<br>Staff/Laura Moon
From left, Marietta Board of Lights & Water Foreman Brad Wheeling operates a tractor hoe as operators Bryan Myers and Phillip Silva re-lay the sewer service at Kirkpatrick Drive and Columbia Drive in Marietta on Friday afternoon.
Staff/Laura Moon
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MARIETTA – Wednesday the City Council will vote on whether to approve the Board of Lights and Water fiscal 2014 budget, but the biggest debate among the group is how to handle Marietta’s excess supply of energy and prepare for the city’s needs in the long-term.

Bob Lewis, general manager of the Marietta Board of Lights and Water, said all three utility services are expected to see a rate increase because of the rising wholesale cost for electricity, water and sewer treatment.

“The major causes of the increases are environmental costs due to EPA regulations regarding coal-fired power generation and EPA/DNR regulations concerning water/sewer infrastructure improvements and treatment costs,” Lewis said.

The exact increase will not be determined until November, when the City Council will vote on whether to approve the rates.

An increase would continue the upward trend that has occurred every year since 2009.

Mayor Steve Tumlin said he knows the livelihood of people on fixed incomes is challenged by increases in service costs for a “product that everybody has to have.”

The BLW budget for 2014 is $170 million, which is an increase of $2.1 million, or 1.3 percent, over last year.

The budget that starts on July 1 was approved by the BLW board in May.

The city-owned utility employs 203 workers. The budget includes a 2 percent pay increase to begin in January.

The city provides electricity to 46,600 customers and water and sewer services to 18,500 people, which Lewis said is about the same as last year.

There are no reserve funds available to balance the 2014 budget, which means “the BLW intends to pass through any increases in wholesale supply costs,” Lewis said.

Further cost increases

Until 2018, more than $10 million annually will be transferred from a trust with Municipal Electric Authority of Georgia to help ratepayers feel less pain, according to Tumlin. MEAG Power is an electrical co-op made up of cities across Georgia that pool their buying power to purchase energy, mostly from Georgia Power.

Tumlin, who chairs the Marietta Power governing board, said the city has not increased the base cost from operational expenses in 25 years.

The council faces raising its base fees for electricity services because MEAG has committed to purchasing far more energy than is being consumed. The electricity co-op has built up too much energy-producing capacity based on overly optimistic projections that were made regarding growth.

Tumlin said it is a problem for many communities that have excess power with no way to sell it, unless it is at a loss.

“I would like to see what the offer is,” Tumlin said.

Tumlin said the city needs to dump the excess and “yet have enough on a 92-degree day to meet the demand and keep our factories running.”

Tumlin said the city must also be aware of future development in Marietta that would require the extra energy.

“(Council members) have talked about numbers more than we ever have,” Tumlin said.

He said the energy business is full of uncertainties and Marietta has a history of staying competitive in the market.

Future energy needs

Councilman Philip Goldstein says he wants to make sure the council fully understands the city’s energy options, so much so that he made a presentation about the situation at last month’s council meeting and will give the same information at the BLW meeting Monday.

Right now Marietta is at a peak on debt owed for building power plants, with $48 million going to MEAG in both 2013 and 2014, according to Goldstein.

Goldstein said the debt payments start to become more “comfortable” in 2026, which should allow more flexibility in dealing with other issues.

He said that while it is true the city owns more energy than it can use at this time, if Marietta sells its shares in these energy companies, the city would be forced to buy that capacity back as the city expands and adds new customers.

“You don’t look at the short term, you look at the long term,” Goldstein said.

Goldstein predicts that planned energy production will be in line with demand by 2028, with no excess.

Goldstein said that after that time the load needed will no longer be reached, so now is the time for the city to reserve money for growth.

The future of the market is all based on assumptions, but selling Marietta’s excess energy capacity would be “short-sided” and would “disadvantage the city.”

“We can save a little bit for today but there is a penalty to the future,” Goldstein said.

Continued debate

Tumlin said Goldstein is correct that the debt from construction and improvements will decrease, but his report lacked all the components of the BLW budget, including operating expenses.

When the discussion includes the full bill, there is not much of an argument, Tumlin said.

Tumlin said the BLW incurs costs when the city or county installs new roads or start development projects that require utility lines to be moved.

Councilman Jim King said there is no need for further investment in more energy plants right now because the buildings have a finite lifetime and it is best to wait.

King said Goldstein wants to increase capacity to sell on the market, but King said the city should aim to produce just enough to cover its customer base.

Comments
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The real problem
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June 09, 2013
According to the BLW's general manager, "The major causes of the increases are environmental costs due to EPA regulations regarding coal-fired power generation and EPA/DNR regulations concerning water/sewer infrastructure improvements and treatment costs." Why then are our political leaders speaking only to the issue of excess supply? Our dependence on dirty coal is what should be driving this debate. Coal plants sully both air and water (hence treatment costs), and contribute greatly to destructive climate change. Such climate change leads directly to extreme weather patterns, like more frequent droughts and floods, both of which make it more difficult to maintain clean water (hence treatment costs).

Marietta and other municipalities affiliated with MEAG need a strategy to phase out coal power, and embrace a clean energy future. Otherwise, the value of MEAG's product will continue to deteriorate, and the ratepayers will continue to pay the price of our leaders' lack of vision.
nonewtaxes
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June 09, 2013
I find it interesting the the Mayor professes concern over residents on fixed incomes paying increased utility rates, yet has no problem initiating a 30% increase in property taxes to bulldoze affordable housing on Franklin Road, so that favored and well-connected interests, along with their surrogates, can purchase land at pennies on the dollar, with no plan to reimburse taxpayers for their so-called "investment" in this re-development scheme.
Do what?
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June 09, 2013
When Goldstein's long term plan pays off, those of us who are being forced now to invest should see a return on our investment.

I would like to own some shares in these energy company holdings in exchange for my paying for some shares in these energy company holdings.

If not shares, then how about dividends, Mr. Goldstein? Come 2028 how about all the new people (ha) pay for electricity, but as a long time investor, I get mine for free? Like those friends who invite you along on a vacation but only if you buy your tickets from their travel agent
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