November 13, 2012

Dalton Utilities raises some rates

Jamie Jones

— A Dalton Utilities rate increase was met with resistance from one board member and concerns from another there may be more needed.

The utility’s governing board on Monday voted 4-1 to approve its 2013 budget that includes $2.24 million in rate increases. Board member Todd Reigel voted against the rate hikes. He said that industrial customers should share in the electricity rate increases and doesn’t believe they are “equitable.”

“I don’t feel like it’s an equitable rate adjustment ... primarily for the residential customers that are going to feel the brunt of this,” Reigel said. “I’d like to revisit that and take a look at an across-the-board adjustment. And the reason for this is we’ve all heard our rates are low, our rates are too low, but it’s hard to put that in context when you’re operating a monopoly and operating with the good system that we have.”

The average non-senior citizen residential electricity bill will increase from $83.38 to $88.84 per month while the average residential natural gas bill will go up from $140.67 to $151.96, according to Dalton Utilities. The average senior citizen residential electricity bill will decrease from $83.38 to $81.41 due to a reduction in the base rate fee for those customers.

Board members and Dalton Utilities President Don Cope discussed the rate increases for about 30 minutes. The other four board members — Cathy Holmes, Tom Pendley, Ken White and Joe Yarbrough — voted for the rate increases.

Cope said the rate increases for residential electricity customers was necessary. He said providing electricity to residential customers is more expensive than providing it to industrial customers, and the utility has traditionally sold electricity to its residential customers below costs.

“We are 8.6 percent negative with our residential customers and we’re recommending a 6.6 percent increase,” Cope said. “We’re not even catching up with this rate increase with the cost of service, with the energy prices we have today which are going up for our residential customers.”

White said the rate increase approved Monday might not be enough.

“I think we’re two to three years behind on rates that we’ve got to make up sometime,” White said. “I would support an across-the-board on top of this but I think you’ve got to have this or a little more, or you’ve got to do this and have a little more later. I think the rates are going to catch up with us, and when it does catch up with us it’s going to be more.

 Under the budget approved Monday, the average residential electricity rate increases 6.6 percent. That could be offset some for senior citizens since the budget also includes a proposed 50 percent cut in the $10 base fee the utility charges for those 65 and older.

The budget includes a $2 base fee increase and a $0.05 increase in its adder fee for residential and commercial natural gas users. The adder fee is what the utility charges above what it pays for natural gas. The current base fee for natural gas is $6.20 for residential customers.

The budget also contains a $0.45 base fee increase for residential water customers and a $2.45 base fee increase for commercial customers in the north side, the Westside, Murray County and Mill Creek areas. Residential customers currently pay an $11.15 base fee in those areas.

The are no planned rate increase for OptiLink except for Enhanced and Supreme cable television, which will go up $2 per month per customer and $0.38 for apartments and hotels.

The budget also includes a 3 percent cost of living adjustment. However, it will not be automatically given to all employees. All positions will be “evaluated and adjusted based upon market-based compensation,” Cope said.