SED manager predicts no electricity rate hikes

April 18, 2014 10:35:16 AM

Carl Smith - csmith@cdispatch.com

 

Starkville Electric Department will operate a Fiscal Year 2014-2015 budget similar to current funding levels and does not need an electric rate hike to subsidize its operations, General Manager Terry Kemp said Thursday. 

 

Kemp delivered a brief, yet pointed preliminary budget presentation to the three-person Starkville Audit and Budget Committee Thursday, one that mapped out improvements to the city's infrastructure and customer service across the next five years. 

 

While sales are projected lower than expected in this year's fiscal budget, he said it would have a nominal impact on SED's budget. Kemp notify aldermen that October 2015 could bring about wholesale rate changes from TVA, SED's regional electricity supplier, but he could not forecast how that would impact rates until more clarity is provided. 

 

"We know they're coming, and they're going to have an effect on retail rates," Kemp said after the meeting. "The challenge is how we structure the rates to have a minimum impact on rate growth." 

 

SED plans to shore up its reliability and accommodate new growth by upgrading a south Starkville substation and providing an additional power supply point within the next five years, Kemp said.  

 

Previously, the city operated with one main power connection on the north side of town that fed into a four-station loop within Starkville. SED worked TVA, who brought in a second high-voltage feeder line to the connection point. 

 

Kemp said TVA and SED have discussed upgrading the substation near the Starkville Sportsplex and adding an additional feeder line, which will help expand capacity and provide redundancies to the local power grid. 

 

The project is one of SED's long-term goals, he said, since such an effort could take TVA two years to bring an additional line to town and additional time to expand and retrofit the utility. 

 

"It's about timing," Kemp said. "What you want to do is look at your load and match it when you need additional capacity. One of our goals is to maintain high reliability." 

 

SED is researching proposals for automatic meters for its electricity and water services, Kemp said. A proposal could be brought before aldermen in at least two months. 

 

Automated metering could allow customers more detail and insight to their daily, weekly and monthly utility usage, thereby creating long-term benefits for both the city and customers as SED works to keep rates down, Kemp said. 

 

An aggressive work schedule could implement the new technology in about two years, he said. 

 

The real value of the system could come if power suppliers charge different rates across daytime and nighttime, or weekdays and weekends. 

 

"I believe it's coming," Kemp said of a future staggered billing system. "A lot of it is because that's what customers are wanting to do. Here again, the technology will allow customers to know what they're using when they're using it, so they can make a good business decision." 

 

Successful deployment of automated meters is SED's most significant challenge of the future, he said, as Starkville has about 25,000-26,000 individual metering points. 

 

Other future efficiency improvements include the department's move to a mobile workforce that reduces the number of handoffs and delays. Mobile units with access to live work orders will allow SED to respond quicker to customers' needs 

 

"We want to look at the cycle time - when people ask, and when we get there," he said.

Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch