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October 16, 2012

Dalton Utilities could raise some fees, rates

Charles Oliver charlesoliver@daltoncitizen.com

Dalton Utilities is eyeing its first increase in residential electricity rates in three years.

The utility’s governing board heard a 2013 budget proposal Monday that included an average residential electricity rate increase of 6.6 percent. That could be offset some for senior citizens since the budget also included a proposed 50 percent cut in the $10 base fee the utility charges for those 65 and older.

“We review costs and revenues produced and see what sectors revenue are short relative to how much we charge in that sector,” said Dalton Utilities President and CEO Don Cope.

The board is scheduled to approve the 2013 budget at its November meeting. Any increases in rates or base fees would take effect Jan. 1, 2013.

Cope said it is more expensive to provide electricity to residential customers than industrial customers, and the utility has traditionally sold electricity to its residential customers below costs.

The proposed budget contains no other rate increase, but it does include a $2 base fee increase and a $0.05 increase in its adder fee for residential and commercial natural gas users. The adder fee is what the utility charges above what it pays for natural gas. The current base fee for natural gas is $6.20 for residential customers.

The budget also contains a $0.45 base fee increase for residential water customers and a $2.45 base fee increase for commercial customers in the north side, the Westside, Murray County and Mill Creek areas. Residential customers currently pay an $11.15 base fee in those areas.

The are no planned rate increase for OptiLink except for Enhanced and Supreme cable television, which will go up $2 per month per customer and $0.38 for apartments and hotels.

Projected operating revenue for 2013 is $173.9 million, essentially unchanged from 2012. That lack of growth concerned some board members, but Cope said the utility’s customers can’t handle more rate increase now because of the economy.

The utility’s operating margin is projected to drop to $16.4 million in 2013 from $18.1 million in 2012.

And after accounting for capital expenses, transfer payments to the city of Dalton and other items, the budget projects the utility will have a negative net cash flow of $10.6 million in 2013, down from a positive net cash flow of $3.5 million this year.

Cope presented the board with several options to deal with that shortfall, including selling some assets, issuing debt or taking on a line of credit.

“We are not asking for anything like that in the budget. We just want you to keep an open mind,” Cope told board members.

The budget also calls for a 3 percent cost-of-living adjustment for employees, the first in four years.

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