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City tries to even spikes in electric bills

COVINGTON - The Covington City Council is attempting to give customers a break from frequent spikes in electric bills.

At its meeting Feb. 4, the council agreed to level the Power Cost Adjustment (PCA) portion of bills.

Rates are established based on the assumed cost of power purchased by the city from the Municipal Electric Association of Georgia and the Southeastern Power Administration.

The PCA is a charge used to collect variations in the wholesale power cost that exceeds the amount allocated in established rates.

For example, if the base rate is 5.8 cents per kilowatt hour, and the PCA is at 1.5 cents, the rate charged to customers would increase to 7.3 cents per kilowatt hour.

Large variations in bills are often caused by a changing PCA, said Bill Meecham, the city's utility director.

In the past, the PCA has had a minor effect on electricity bills, but with the rising cost of power, the impact is more significant now, and during the last two years, the city has received complaints from customers about frequent, unexpected spikes in bills, Meecham said.

So the council has agreed to level the PCA so that it will remain at a consistent rate throughout the year.

This will be done by forecasting the power cost to Covington as included in MEAG's budget and averaging the PCA and that average each month all year.

In 2007, the PCA ranged from a low of 1.25 cents in February to a high of 2.33 cents in September.

If the new technique had been applied in 2007, the PCA would have remained at an even 1.77 cents all year, but the city would have still collected the same amount of revenue.

"At the end of the year, when (customers) paid all the bills, they would have paid the same amount of money but their bills would have been more stable," Meecham said.

The level PCAs will take effect in either March or April.

But bills will still fluctuate based on usage, Meecham warned.

"You will still have variation from month to month based on the amount of power used, which is influenced by temperature," he said.

The change is likely to impact industrial customers more so than residential because of budgeting considerations.

"It benefits them to budget on an annual basis what the anticipated costs are to be next year. If the PCA's are varying a lot, those bills are a lot less stable from month to month," Meecham said.

But Councilman John Howard said residents will see some relief too.

"It should allow citizens to better budget electrical costs because they won't be hit with spikes," he said.

Crystal Tatum can be reached at crystal.tatum@newtoncitizen.com.