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City looks to adjust electric rates
If OK'd by council, residents would see rates drop this year, but go back up next year.
Thursday, February 26, 2009
City leaders are considering adjusting Lebanon's electric rate structure, but they said residents will ultimately not see much of a change.
If the rate structure is approved, Lebanon residents' rates would drop around 3 percent this year, only to rise the same amount next year, city officials said. City leaders are hopeful the rate changes will have a larger impact in attracting larger businesses.
Lebanon Electric Department director Shawn Coffey said the goal of the rate restructuring is to make the city's electric rates more comparable to Duke and DP&L rates. Coffey said while on the whole the city's rates already are closely aligned with neighboring power companies, this average is misleading.
Like most power companies, Lebanon divides its electric rates into five different tiers based on electrical use. Coffey said comparisons of individual tiers with other electric companies show large discrepancies between charges.
"The goal (of the restructuring) is to tighten the band so we can be more competitive with businesses," Coffey said.
City leaders said cheaper electric rates will make the city attractive to businesses considering a move to the area. A electric tax credit was one of the incentives used to lure Cincinnati Bell Technology Solutions — and 100 jobs — to Lebanon last year.
While most tiers will see a rate decrease if the rate adjustment is approved, ranging from 3.5 to 1.9 percent, the tier two rate — generally small businesses — will see a rate increase of 11.7 percent.
The legislation also calls for a 3 percent rate increase across the tiers in 2010. The increase is necessary to keep positive cash reserves and pay for planned improvement projects, Coffey said.
Coffey noted the rate decreases and increases will not affect the entirety of the fee charged to customers. A portion of the fee — the power supply cost adjustment and a tax assessed by the state — will remain unchanged.
Mayor Amy Brewer said she supports the action.
"Electric is an important part of our infrastructure and needs to be
prioritized."
City council will vote on the adjustments March 10.
