September 28, 2013 10:19:07 PM
Nathan Gregory - email@example.com
Columbus Light & Water customers will pay an extra 1.5 percent per month starting Oct. 1.
For a residential customer paying a $100 utility bill each month, the increase adds $1.50 to the bill.
Tennessee Valley Authority officials announced the utility rate increases in August after its board approved the increase to all its local power distributors. The CL&W board voted 3-1 Friday in favor of the transfer of that rate to customers. Andrew Colom was the lone vote against the motion. David Shelton, Jimmy Graham and Charlie Newell voted in favor. Brandy Gardner was absent.
The board may revisit the matter next month at Colom's request. Board attorney Jeff Smith said state code allows municipal utility boards to revisit potential rate action at any time.
General manager Todd Gale said CL&W could not absorb the $600,000 charge from TVA as a result of the increase.
"Our sales are trending with TVA's sales. Our sales are way down, too," Gale said. "Columbus Light & Water has not added their markup on top of any TVA bill since 2009. In essence, we've been three and a half years living off the same expenses we've been living off of."
"We've been eating it every year," Graham added.
Colom said sales are indicative of a larger problem than a 1.5 percent increase from TVA.
"My concern is not necessarily this one year," he said. "It's for the general trend and passing on the rate increase and not understanding what we're going to do about our trend problems."
The closure last year of Omnova Solutions' manufacturing operations hurt CL&W's sales based on its industrial status, Graham said.
"Individual customers can't tote the note," he said. "Our customers paying what they pay is not profitable so if we continue to lose industrial, we've got a big, big problem."
Gale added that Golden Triangle Development Link CEO Joe Max Higgins is scheduled to attend October's meeting to discuss economic development opportunities.
Graham then noted that CL&W's competitors -- 4-County Electric Power Association and East Lowndes Water Association -- charge more for their services, with 4-County pricing them at 8 to 12 percent more and East Lowndes pricing theirs at up to 25 percent more.
"Can you tell me why you're doing that and would you do that in your business?" Graham asked.
"I would say if the people in the city can't afford the rate that the people in the county can afford, then it does make sense. In my experience renting to (tenants in Columbus), they are already struggling with their utility bill," Colom said. "I know because they're paying me rent and they're constantly complaining about their utility bill. Do I think in a private enterprise that I would run my business that way? Absolutely not."
Gale added that rural utility providers have less density, so it costs them more to connect to those customers because there are fewer of them per mile.
"All that's warm and fuzzy," Graham replied, "but when it comes down to it, we've got to pay our bills and we've got to maintain reliability. I think that is number one. Our customers ... are depending on us to provide them with a reliable source and electrical source. We've got to charge enough to do that."
Colom said after the meeting that he believes the board could offset the $600,000 increase from TVA without raising customer rates by pulling that amount from the utility's five-year, $5 million capital expenditure fund. That money is being used to replace all wooden utility poles with metal ones to prevent liability, Gale said, and CL&W is roughly halfway through that process. Colom wrote a column published March 6 in The Dispatch stating that the board should dip into that fund to lower customer rates.
4-County officials have not announced a rate increase, but last month Jon Turner, manager of public relations and marketing, said that utility board has directly passed rate increases from TVA onto customers without its own markup in the past, and that would likely happen again.
In other business, the CL&W board:
■ Approved its water division budget for the 2014 fiscal year. The budget projects $3,807,201 in sources and application of funds, $4,482,200 for funds available for bond coverage, $3,861,138 required to cover both bonds and state revolving fund loans and the remaining $621,062 for capital improvements. The board also approved a $950,000 capital improvement budget, meaning it would pull $328,938 from reserves to make up the difference;
■ Authorized Gale to advertise for proposals for CL&W's proposed automatic meter reading system;
■ Heard an update from John Malone, newly named general manager of TVA's Mississippi district.
Nathan Gregory covers city and county government for The Dispatch.