Mayor: Electricity deal could save Amherst residents upwards of $300,000


By Jason Hawk - jhawk@civitasmedia.com



<p style="text-align: right;">Jason Hawk | Amherst News-Times Mayor Mark Costilow answers questions about electricity costs and his proposal to lock in market rates.

Jason Hawk | Amherst News-Times Mayor Mark Costilow answers questions about electricity costs and his proposal to lock in market rates.


Locking in lower electricity rates could save Amherst ratepayers somewhere between $300,000 and $400,000 per year starting in 2017.

Mayor Mark Costilow asked Monday to ink a deal with American Municipal Power that could significantly cut into the city’s energy spending, and found interest from city council’s utilities committee.

Here’s how it works: Amherst buys a little more than 75 percent of its power each year from coal and hydroelectric plants, which have set prices for each kilowatt hour residents use.

Our town’s remaining electricity is bought on the open market, where prices fluctuate up and down.

That usually costs around six to seven cents per kilowatt hour, but rates right now are very low. AMP is offering to negotiate a locked-in price of 4.9 cents or lower.

Costilow said he believes 4.5 cents would be possible if council were to act quickly. “Rates are the lowest they have been in history, our recent history,” he said.

Every penny saved amounts to roughly $300,000 in savings, passed on directly to residents, he said.

Just don’t expect your power bill to go down.

While the proposed three-year contract could save a big chunk of cash, it would likely only help to counter increases that are already anticipated.

Some of Ohio’s cheap, dirty coal power went offline last year and some more expensive, cleaner hydro plants will come online in 2016, Costilow said.

The utilities committee voted 7-0 to send the energy deal to the floor of council, where it will be considered this Monday on first reading.

However, the issue didn’t move forward without reservations.

Councilman Joe Miller voiced concerns about working with AMP, which has long been involved in a lawsuit with contractors over canceled power plant projects.

Years ago, the Environmental Protection Agency issued three final permits for plants to be built on the Ohio River, said council president John Dietrich. Halfway through the project, it was halted in favor of gas power.

Amherst and other AMP investors are on the hook to pay out money in that case.

“The bills are substantial for that, and we pay them so much a year as the bills go in. We don’t know how much to this day those bills are going to cost us,” Dietrich said.

Councilwoman Jennifer Wasilk said such suits are common. There is no electric utility or group that is not being sued for similar issues across the nation, she said, calling cancellation of power plants a “pervasive” situation linked to political decisions.

Law director Tony Pecora told officials the city is under contract and has been for many years to buy power through AMP, and locking in a lower rate would just be one way to fulfill that obligation.

Jason Hawk can be reached at 440-988-2801 or @EditorHawk on Twitter.

Jason Hawk | Amherst News-Times Mayor Mark Costilow answers questions about electricity costs and his proposal to lock in market rates.

http://aimmedianetwork.com/wp-content/uploads/sites/43/2016/02/web1_IMG_9742.jpg

Jason Hawk | Amherst News-Times Mayor Mark Costilow answers questions about electricity costs and his proposal to lock in market rates.

By Jason Hawk

jhawk@civitasmedia.com

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