Electricity bills will have to increase to cover Amherst’s costs, city council learned last Tuesday.
Expect a $2.50 fee increase to appear on home power bills starting in 2018. Rates will increase another $2.50 in 2019 and again in 2020.
John Courtney, an energy consultant for the city, explained the results of a study that found current charges to customers aren’t keeping up with Amherst’s expenses related to buying and supplying power.
Without rate changes, he projected a $890,000 shortfall in electric revenues by 2020. Courtney said the power supply cost adjustment — which appears on utility bills as the PPA — needs to jump about seven percent in order to keep up with expenses of about $11 million per year.
Under the revised rate structure, the PPA will shrink but won’t disappear.
The last time such a rate study was conducted was 1984. According to Courtney, going 33 years without balancing the rates has left big businesses subsidizing home owners.
While everyone’s bills will increase, he said residential customers will see a larger increase than Pierre Foods, the Amherst Schools, or Giant Eagle, for example, which are among the city’s largest power consumers.
About half of Amherst’s power usage is residential, which is atypical. Most cities have a larger share of commercial and industrial consumption.
Even after the increases, Amherst rates will be less than Ohio Edison’s, said mayor Mark Costilow. He said Amherst will remain competitive when compared to other cities in Northeast Ohio.
At the same time, he is asking city council to repeal a 2001 decision that places Ohio’s required kilowatt-hour tax on electricity sales in the city’s electricity department budget.
Costilow wants that money to go into the general fund, where it can be used to purchase trucks, pave roads, or go toward other projects.
Jason Hawk can be reached at 440-988-2801 or @EditorHawk on Twitter.