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Columbiana city officials debate electricity rates

February 13, 2012
KATIE SCHWENDEMAN - Staff Writer , Salem News

COLUMBIANA-A decision in March of 2011 to set electric rates at the same level for all city customers is stirring some debate among city officials.

Councilman Bryan Blakeman made the motion to permanently set the residential rate for customers at the same amount as the industrial rate, making it less expensive for customers.

The decision was unanimously approved at that time, but Councilman Bob Bieshelt is now questioning the rates, which he says have increased by 30 percent over the last year.

"I've gotten a few calls about increases in electric rates ... (30 percent) is pretty significant when you're on a fixed income," he said.

According to a rate analysis prepared by City Manager Keith Chamberlin last year, customers were paying a minimum of .081 and a maximum of .089 cents per kilowatt hour from April through September.

The actual needed rate was anywhere from .095 to .100 during that time. By December customers were paying around .104 cents per kilowatt hour.

(The needed rate is based on the city's cost for power and budgeted costs, divided by the kilowatt hour purchased.)

"It seems like we are having a pretty mild winter so that in itself might bring down the consumption of power. This defies all economics I ever knew about-it went the other way," Bieshelt said.

Chamberlin argued that when council agreed to charge the same rate for all customers it was done with the understanding that rates would be monitored and slowly increased to the actual needed rate over time.

Councilman Lowell Schloneger pointed out that charging everyone the same rate had to result in an increase over time in order to keep the electric fund from going into the red.

In September of 2010 the fund was at $2.9 million. By October of 2011 the fund was down to $2 million.

When council first considered dropping the rate, some city officials were concerned it would result in a drop in the electric fund, which is used for the maintenance and upgrading of the electrical system.

Blakeman said the fund decrease is not a result of the rates, but a result of work to the north substation.

"What people are paying, it's not my fault, it's not Bob's fault. That fund didn't start going down until we started working on the north substation ... we were buying transformers to work on the substation; it had nothing to do with rate and cost," he said.

Bieshelt said city residents will attend the Feb. 21 council meeting to discuss the increase and asked Chamberlin to have the proper information ready to address their concerns.

"We need to pay attention when the taxpayers speak. It's my understanding they are going to show up at the next meeting so we should be prepared to discuss those questions," he said.



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