Monticello Officials Get Electrical Rate Overview
The Monticello City Council held a work session Tuesday evening for a discussion of electric rates with information provided by two speakers with Electric Cities of Georgia (ECG).
Monticello purchases its power from the Municipal Electric Authority of Georgia (MEAG), and John Giles with ECG explained the difference between MEAG, the power producer, and ECG who provides the retail end of power production. The cost of everything to the meter is MEAG’s responsibility, and from the meter to the city, ECG. Some 52 communities are members of ECG.
ECG can also help cities with other utilities such as water and sewer or gas.
ECG provides analytical services to its members along with other services. Mr. Giles explained the expenses associated with providing electricity, and the difference in what MEAG is responsible for and what the city is responsible for, and how ECG can assist.
After Mr. Giles gave an overview, Sara Leonard, from the analytical department, gave some particulars. She gave an electric rate overview which requires the city to collect sufficient revenues to cover costs, rates are cost based, and they must be fair, stable, understandable, implementable, non-discriminatory and competition.
She explained the rate process which begins with determining total costs, then the cost of services, revenue and expense projection and rate design. She also had a pictorial display showing what is the wholesale cost and what the local costs are. Local costs include line crews, supplies and materials, meter reading and equipment/repairs and maintenance.
Those costs are used to determine the rates for Monticello customers, who can be residential, commercial, or industrial. There is also a power cost adjustment and security lights. Ms. Leonard said Monticello’s electric generation creates revenues for the city general fund in the amount of $300,000, and some $200,000 to the water department.
She said that rate changes should be made so that electricity is not subsidizing the water department. She said it is not unusual for cities to use electric revenues for general fund. But she recommended a revamp of rates, noting that the power cost adjustment should not be as high as it currently is. She is recommending a total revamp of electrical rate. The city now figures the power cost adjustment (PCA) at 2.72 cents per kilowatt hour. She recommends the city look at rates and change them rather than raising the PCA. She also recommends raising the base charge.
City council members present agreed to ask ECG to analyze everything about Monticello’s rates and come back with a recommendation. ECG representatives indicated they would be happy to do that and there is no additional fee. City Council members at the meeting included Mayor Bryan Standifer, Mayor Pro-tem Gail Harrell, and Council Members Jenny Murphy and David Wease. Council member Cynthia Miller had indicated last week she had a conflict with this week’s meeting.
Without having complete analytics, Ms. Leonard already recommends that the city roll the current PCA into standard rates, then reset the PCA to 0. She said you don’t want to do away with it, because it may need to be increased again at some time in the future, but she said if it gets to be as high as it is, a rate review is indicated. She recommends creating a separate small commercial rate, and increasing base charges and introducing demand charges while reducing the usage charge.
Mayor Standifer said the city had paid off some debt, and is in a good position now to review and possibly change electric rates. Ms. Leonard strongly encouraged the city officials to stop funding water and sewer with electric revenues.
Beyond that, she offered to complete a rate review and report back to the council.
After the review by Ms. Leonard, the council went into closed session.
