The seven-member Board of Lights and Water, which operates the city’s utility, voted unanimously on Monday to table action on a proposed power rate increase, citing the need for more information.
Beginning in January, every month the board delays action the BLW will be forced to absorb a $400,000 loss caused by increasing wholesale rates. The utility is looking to close a $5 million deficit created by higher costs from the utility’s power wholesaler, the Municipal Electric Authority of Georgia, and its water supplier, the Cobb County-Marietta Water Authority.
The utility’s general manager, Bob Lewis, has proposed increasing the base charge levied on power customers by $2 and decreasing a discount offered to ratepayers who pay their bill within the first 13 days from 10 percent to 5 percent.
That would mean an increase of $7.11 on an average bill. Cutting the discount in half alone raises $4.3 million, but leaves the utility looking for another $700,000.
Board members say they want to carefully consider all options on the table.
Utility staff have also proposed suspending payments to the fund the BLW pumps money into for the expansion of Plant Vogtle, a nuclear plant south of Augusta, a plan introduced by Councilman Philip Goldstein.
The city won’t see the money it’s setting aside until 2036 or 2037, Goldstein has said, but there’s a period of about 10 years before then, from 2025 to 2035, when the utility will have paid off its debt and won’t yet see a return from the expansion of the nuclear plant.
Alternatively, the remaining $700,000 needed could come from the utility’s $9.4 million surplus reserve account.
Those two choice would increase rates on the average customer by $5.21.
Though board members delayed action on a power rate hike, water rates will go up Jan. 1 by 10 cents per 1,000 gallons used after the board unanimously voted to raise the rates.
Alice Summerour, a citizen board member, wants to wait until late February to consider raising power rates. That’s when the BLW will receive a report from Marietta-based GDS and Associates, which the utility paid about $45,000 to study its rate schedule.
“I would hope that we would wait until we get that,” Summerour said.
Lewis said he’s concerned about the $400,000 per month wholesale increases that will be seen in January, two months before the earliest a decision could be made if the board waits for the consultant’s report.
“My issue is we start getting charged these higher rates come Jan. 1,” Lewis said.
Marietta Mayor Steve Tumlin, who serves on the board, says action needs to happen quickly, but it’s unlikely to come before the utility gets hit with higher costs.
“We’ve got to do this expeditiously, but by (Dec.) 31? I don’t think so,” Tumlin said.
Terry Lee, also a citizen member of the board, is confident the BLW can absorb rising costs from its $9.4 million reserves until a decision is made.
“We want to get it right as opposed to rushing to get it done because it’s costing us,” Lee said.