Covington City Council studies changes to electric utility rates

COVINGTON — The Covington City Council will consider changes to the city’s electric utility rates following recommendations by a consultant from Electric Cities of Georgia.

John Lansing told council members at a Thursday night work session that under the current rate structure, the utility cannot continue to generate enough revenue to support its operations and make its targeted $5 million annual transfers to the city’s general fund.

Lansing said the system was underfunded by about $1 million in 2013. In addition, he said he expects the utility to see a $2.8 million increase in its costs from the Municipal Electric Authority of Georgia in 2014. MEAG is a consortium of public power systems in Georgia.

Lansing said that the city has not increased its electricity rates since the 1990s, although the Power Cost Adjustment, which is the change in the wholesale cost of power, has increased and has been passed along from MEAG to Covington power customers.

Lansing said the city has been able to maintain its current rate schedule simply through growth.

“The Electric Department’s been making $5 million transfers to the general government all through these years,” he said. “The PCA has gone up to .0276, but that just matches the MEAG increases. And the rates have been the same. So how have we done that? You know that the electric employees have gotten raises, you know the health insurance has gotten three times as expensive. How have we not increased our rate schedules in 15 years? The way we’ve done it is growth. You brought new customers into Covington. The customers who were already here are using more.”

Lansing recommended that the council consider establishing rates for two classes of commercial customers based on customer demand and energy usage; increasing fees for security lights; adjusting rates for residential customers; and establishing rates for winter and summer, with both categories covering six months each.

The council asked Lansing to bring proposed changes to a work session tentatively set for 5:30 p.m., Dec. 12, at City Hall.