COVINGTON — The Covington City Council reached a consensus on increasing the city’s electric utility rates during a work session on Thursday.
Electric Cities of Georgia consultant John Lansing told council members in November that under the current rate structure, the utility would not be able to generate enough revenue to support its operations.
For the city to make its targeted $5 million annual transfer to the general fund, Lansing recommended rate changes that would increase the revenue by $2.5 million, an overall 6.5 percent increase.
For residents, there will be a seasonal rate increase of $0.84 cents for the winter and $2.80 for the summer based on the average usage of 1131 kilowatts per month.
The months of November through April are considered winter and summer is considered as May through October.
Covington City Manager Leigh Anne Knight calculated the average increase a resident will see on the electric utility bill is $4.23 per month, totaling about $50.80 for a year.
The base rate for residents will increase from $8.45 to $10.
The council also reached a consensus on establishing rates for two classes of commercial customers based on customer demand and energy usage, as well as an increase fee for security lights.
The Covington Council is slated to vote on the city’s electric utility rate changes at its Jan. 6 council meeting.
Knight said once the ordinance passes, city staff can begin changing the rates and testing the billing system before the new rates take effect in March.
Lansing suggested the city inform residents and businesses of the rate adjustments with a simple description on their February bills.
“While this is something we all hate, it’s something we have to do,” Mayor Ronnie Johnston said.
Council member Keith Dalton said the city will have to continue to be “fiscally responsible” so the rates will not have to increase in the future.
The city’s system was underfunded by about $1 million in 2013, according to Lansing, and he expects to see a $2.8 million increase in its costs from the Municipal Electric Authority of Georgia (MEAG) in 2014. MEAG is an association of public power systems in Georgia.
“Once the council takes this step to increase the rates, there shouldn’t be an increase for a while based on the projected operating results for Covington,” Lansing said. “You won’t have to see me again until 2017.”