COLUMBIANA - The city contracts with American Municipal Power (AMP) because of its bulk buying ability and local control of utility rates, Jack Myers of AMP told council this week.
Myers was before council to give new members a rundown of the power supply program, and Mayor Bryan Blakeman said residents have asked him why the city purchases its power from the company.
The city contracts with the non-profit for its power and sets customer rates on a monthly basis based on the cost of power and overhead.
The city originally contracted with the company on Oct. 1, 1983 and pays a membership fee of about $4,000 every few years, Finance Director Mike Harold said.
Columbiana is one of 124 members receiving full or partial power from the company, and some of the power comes from two federal hydroelectric projects in New York that are licensed through 2027, Myers said.
The state of Ohio receives interruptible power periodically from those projects based on water conditions, and in 2012 Columbiana averaged 1.617 megawatts through that, he added.
The city also receives a portion of hydro power from the Belleville project on the Ohio River. Other diesel and natural gas supplied power comes from the Freemont Energy Center, the JV1 project in Cuyahoga Falls and the Prairie State project.
Myers said the benefit of being an AMP member is local control. "You are the ones that drive AMP ... you set your own rates. We take input from the members and try to give them the best prices and contracts, to keep everybody's costs down."
Costs the company has no control over are transmission and ancillary charges, he said, adding transmission costs seem to be going down, however.
He also said he believes market prices for power will be "fairly attractive" over the next three years.
Blakeman agreed the benefit of using AMP over an electric supplier like Ohio Edison is their ability to set rates locally, although in the past he has said the rates are too high.
City users currently pay 11.6 cents per kilowatt hour, which was the same rate as last month, and the same as in September of 2013. In December users paid 11.5 cents, Harold said.
One woman spoke up during the meeting and said the rates aren't necessarily different between the two companies, to which Myers responded in that case the difference comes down to reliability.
Councilman Dick McBane asked what happened to renewable energy standards, and recalled that two years ago the federal government began enforcing those standards.
Myers said municipal systems weren't subject to the law but some of their hydro and solar power projects are, like the Blue Creek Wind Farm in northwest Ohio.
In May of 2012 the city agreed to purchase 800 kilowatts of power from the wind farm, which is contracted with AMP. The agreement is for 10 years and the city only pays for energy generated.
The purchase cost was initially set for $35 per megawatt and will increase to $61.43 per megawatt by the end of the 10 year period.
Eight-hundred kilowatts is just under one megawatt and at that time, the city's average cost for power was around $65 per megawatt.
The agreement also included renewable energy credits, which could be sold on the market to lower the actual cost of power. The wind farm has a combined 152 wind turbines in Pauling and Van Wert counties.
With regards to green energy Myers said he believes it will be "levied on everybody at some point in the future."
He also said a majority of AMP members are already at the 25 percent federal requirement that electricity must come from renewable energy sources by 2025.
In other business, council approved:
- A request from Crystal Siembida Boggs to allow the Siembida and Boggs Philanthropic Foundation to host a new 5K race at Firestone Farms July 13 beginning at 8 a.m. More information is available at www.SandBFoundation.org.
- A request from Jack Guy to run the annual 4th of July program in Firestone Park beginning at 8 a.m.
- Giving second readings to legislation enacting and adopting a supplement to the code of ordinances, amending section 5.2 of the policies and procedures manual, and amending rates of pay for part-time pool employees and full- and part-time city employees to reflect the minimum wage increase.
- An executive session to discuss the purchase of property. No action was taken.