Troy council reviews utility rate changes

Published 5:07 am Wednesday, December 15, 2010

“How much are my rates going to go up at my house?’

That’s the question Troy City Council member Wanda Moultry posed to Mayor Jimmy Lunsford during Tuesday’s work session before the council meeting. “That’s what people want to know, and what I need to be able to answer.”

The council was discussing the utility rate increases expected to take effect Jan. 1, 2011. And the mayor’s answer was surprising, to some members:

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“The rates actually could be less than what you were paying in 2009,” Lunsford said.

Council members began the two-part process of implementing the rate increase Tuesday with the reading of an ordinance amendment allowing the city to increase the rate per kilowatt hour by 4.5 percent effective Jan. 1, 2011, and again by another 4.5 percent Jan. 1, 2012. Also, the city would increase the base charge for residential service by $1 per month each year: to $8 per month for 2011 and $9 per month in 2012.

The utility bills customers receive reflect four charges: a base rate; a fuel charge, which is passed along at cost from the fuel provider; an ECA charge, which is basically the cost of the financing of utility bonds; and the usage charges, which are billed per kilowatt hour.

Lunsford explained that because the fuel costs are decreasing considerably compared to 2009 rates (the last complete year available for comparison), residents in Troy could actually see a decrease in their utility bills, even though the ECA charge and rate per hour will increase.

“Fuel costs have decreased substantially since 2009,” Lunsford said. “And if the fuel costs come in as projected, our average cost per kilowatt hour could actually decrease.”

The best-case scenario, he said, would be an hourly charge of $.09373 per hour, or $93.73 per 1,000 hours consumed. For comparison, the 2009 average hourly charge was .09940, or $99.40 per 1,000 hours consumed – due primarily to the high cost of fuel.

“Worst case scenario, if we had the same high fuel rates as we did in 2009, with the costs plus the ECA, the rate would be $105.90 per 1,000 kilowatt hours,” he said during the work session.

“But I can tell you we’re still lower than our competitors” and surrounding cities, he told the council.

“Our rates for 2010, 2011 and 2012 will still be less than the 2009 rates of Alabama Power,” he said during the council meeting.

Council members will vote on the ordinance at the Dec. 28 meeting.

In other business, the council:

• Approved the closing of the Troy Landfill at the end of this month. Vaughn Daniels, public works director, told the council that the landfill has been closed to the public since April. Changes in state regulations are prompting the decision to close the landfill and truck debris to another landfill site. “The garbage has been going to Brundidge for a while, so we’re only talking about demolition and construction debris,” the mayor said. Daniels said he did not expect any rate increases to customers as a result of the closing.

• Awarded an on-site retail alcohol licenses to The Ambassadors LLC, which operates a building available to rent for special events. The building is located at 1320 South Brundidge St.

• Approved the transfer of off-site beer and wine permits for Pinkard’s Gas and Food Market No. 4 and Fillin’ Station 1 to new owners, Casco Inc.

• Declared the weeds at 309 First Ave. a public nuisance, giving the building department authority to have the property cleared.

• Approved the reappointment of Jack Norton and Greg Anderson to the Board of Adjustments, for terms ending Nov. 2013, and the appointment of Judy Bazzell to the Charles Henderson Child Health Center board, for a term ending in 2015.

• Heard a report in executive session from Marsha Gaylard, president of the Pike County Economic Development Corp., regarding recruitment efforts. “Hopefully some of these things will come to fruition,” the mayor said.

• Heard a report from the mayor that the final right of way has been purchased for the South Brundidge Street repair project. “We’ve sent the markups back to the state DOT for review, and we hope to let bids in January or February,” he said.