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SALEM -- Residents in the city's natural gas aggregation program can expect to see their usage rate go up again, this time because the contracted supplier, Volunteer Energy, declared bankruptcy.
City Law Director Brooke Zellers delivered the bad news to council members during their meeting Tuesday night.
When asked by Councilwoman Cyndi Baronzzi Dickey how much the price would increase, Zellers said the price under the contract had been 49 cents per Ccf and was increasing to 69 cents per Ccf with Columbia Gas as the default supplier for now.
"In the meantime, we're going to look for another supplier," Mayor John Berlin said.
The city was in the middle of its contract with Volunteer Energy for gas aggregation, which allows a community to negotiate a lower price based on the buying power that comes from being part of a larger group.
When asked what happened, Zellers said the company wasn't able to buy gas on the secondary market to meet its contractual obligations, in part due to rising costs.
The company filed for bankruptcy on March 25 and he learned Tuesday that the bankruptcy court nullified all of the company's aggregation contracts, including the Salem contract.
Zellers stressed there would be no interruption of services. Columbia Gas will act as the default supplier for natural gas for Salem residents who were part of the aggregation program. Berlin and city Service/Safety Director Joe Cappuzzello are working with AMPO Inc., who represented the city's interests in the program, to shop for a new supplier as soon as possible.
Residents have the ability to shop around themselves, but Berlin said they may want to wait to see what kind of deal the city can get. He said 131 communities were under
aggregation programs by Volunteer Energy.
Last year at this time, the city learned that Volunteer Energy had hiked up the locked-in rate from 41 cents per Ccf to 49 cents per Ccf, blaming an unexpected increase in their transmission cost. An additional increase of 9 cents per Ccf in March 2021 was taken off and was supposed to be refunded to customers, with the price put back down to 49 cents per Ccf.
Councilman Jake Gano reminded residents that they do have the ability to shop around by visiting energychoice.ohio.gov. He said "a lot of times you can save a good chunk of money."
In other business, Cappuzzello reported that work had begun on McCulloch Park, with the street department removing the concrete and engraved bricks and the city electrician set to do the electrical work. He said the city is working with Salem Preservation on the project and stressed that the engraved bricks will be re-installed as part of the renovation.
He also said the bid opening for the summer street paving project will be 11 a.m. April 22 at city hall. The Ohio Department of Transportation will hold the bid opening for the downtown sidewalk renovation project on April 25.
Council held first reading on an ordinance to allow awnings and structures over sidewalks, but with rules requiring approval of materials by the zoning officer for structural integrity. There was also a first reading on an ordinance to increase the cost of a fence permit from $10 to $25.
Council had to again approve two resolutions asking the auditors in Columbiana and Mahoning counties to certify the amounts for a 1-mill recreational levy renewal to be placed on the November ballot. Resolutions had already been approved at the last council meeting for the levy, but a language change was required in the resolution. Separate resolutions will have to be approved once the certifications come back from the auditors. The levy for park operations expires this year, with a five-year renewal being sought. The renewal won't cost taxpayers any more than what they're already paying.
A resolution was also approved authorizing the city to participate in the Ohio Department of Transportation winter contract for road salt, with Salem agreeing to order 1,700 tons of salt for next winter. The contract allows for the city to go 10 percent over or under the set amount. The price per ton won't be known until ODOT finalizes its contract.
Council also commended retired street department foreman Jim Phillis for his dedicated service to the city from Sept. 5, 1989 to March 10, 2022. He was named as foreman on July 1, 2010 and remained in the position until his retirement last month.
The next council meeting will be 7 p.m. April 19, with a public hearing set for 6:45 p.m. regarding the bonds for a hospital project.