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HAMILTON — Despite rising fossil fuel costs, city electric rates should remain at current levels until they are re-examined in August.

City utility officials made a presentation to Hamilton City Council Wednesday, May 28, joined by its rate consultants to discuss the last increase, which took effect March 1.

Most of the presentation explained the normal power cost adjustment charges on electric bills. The adjustment takes place twice annually, in February and August, and either goes up or down depending on usage and costs. In March, it went up. Governmental mandates also played a role in the increase.

Power from the Greenup Hydroelectric plant is down because of high water in 2008, but it still has a "reasonable shot" to make its 2008 estimated output as water drops this summer, officials said.

Consequently, no immediate increase is expected, but one is on the horizon because the price of fossil fuels is expected to continue its upward climb.

"Unless the world changes, we'll need to increase our PCA (Power Cost Adjustment) in August," said Doug Childs, manager of utility services.

The presentation took place Wednesday to inform Kevin Richard, chief operating officer for Mohawk Fine Papers, of the reasons for the March increase. Richard had visited city council on April 9 and ripped city officials for the electric rate increase, saying it was putting manufacturing jobs in danger.

Mohawk, headquartered in New York, is the city's largest electric customer and employs about 180 in the city. It estimates the increase will cost it about $250,000 a year.

Despite assurances that projects like the Meldahl hydroelectric dam and Prairie State clean coal facility will help stabilize costs when they come online in 2012 and 2013, Richard accused council of being shortsighted.

He said that none of the money from the March increase would make the power plants more efficient.

"I really hope that when Meldahl and Prairie State come online that there are manufacturing facilities left in Hamilton to benefit," Richard said.

Councilman James Noonan questioned Richard's belief that council was shortsighted because of investment in long-term projects to stabilize costs. In addition, he cited sharply rising fuel costs as a factor in the increase.

"There are certain things you cannot control," he said.

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