Charles Oliver
The Dalton Utilities board voted 4-1 on Monday to approve a 2010 budget that raises rates across the board 4 percent for electricity, 8 percent for water and 6.5 percent for wastewater. Those were roughly half the increases recommended by staff when the preliminary budget was presented in October.
Currently, a Dalton Utilities residential customer pays 7.45 cents per kilowatt hour (kWh). That will increase to 7.74 cents per kWh in 2010, according to information provided by the utility.
Board members said they understood the area is in a recession and rate increases will fall heavily on customers but the utility can not afford to keep selling electricity, water and wastewater services below costs.
Officials said with the rate increases, projected 2010 revenues are $197.9 million, compared to $177.4 million in projected revenues through the end of this year.
Dalton Utilities CEO Don Cope said even the rate increases the staff had asked for would not fully cover costs, and the rate increase the board approved will leave the utility with a negative cash flow of $8.8 million next year. He said the utility will cover that with income from its investment income, just as it has subsidized rates for the past 15 years. But he said the utility’s ability to do that is shrinking. Cope said the utility will have about $27 million in unrestricted funds next year.
The utility held electric rates flat last year but raised water and wastewater rates 20 percent across the board.
“I’d like to see it stay the same,” said George Mitchell, the only board member to vote against the increases.
Board members Smith Foster, Frank Robertson, Cathy Holmes and Tom Pendley voted for the budget.
Mitchell noted the area’s high unemployment rate and relatively low levels of manufacturing activity and said he didn’t want to raise rates until the economy picked back up.
Other board members said this isn’t the best time to raise rates but they said they were concerned that rates did not cover costs in any sector of the utility’s business.
“Our utility costs are actually going up 14 percent. What we are really doing is subsidizing industry by selling below costs,” said Robertson.
He said the utility has also deferred routine maintenance for the past two years. Cope added that the utility has forgone about $45 million in total work. Robertson said that cannot continue. He said he worries that when the utility is no longer able to put off capital projects or subsidize services with its investment funds it will have to enact major increases.
“Even with the increase, we would still be 30 percent under TVA and 37 percent under Georgia Power (for electric),” said board chairman Foster. “There’s never a good time for an increase, but those numbers are significant.”
“Any increase in this business environment is something that’s difficult for any of us,” said J&J; Industries CEO Jim Bethel. “On the other hand, I’m sure the (Dalton Utilities) board and the staff has arrived at a figure they can live with. We realize that they are under a tremendous amount of pressure, not only from a raw energy standpoint. But government regulations are increasing the costs of a lot of basic services.”
Board members also agreed to put a sewer expansion to the Whitfield County industrial park off the South Bypass out for bids. The estimated cost is $220,000, which will be paid by IVC, the floormaker that will occupy the site.
And the board agreed to put the second phase of the sewer expansion to the new Whitfield County high school near Prater’s Mill out to bid. The estimated cost of that is $1.75 million. The board approved a $1.74 million bid for the first part of that project from Ellis Contracting. Cope said $2 million of the total cost of the project will be paid by Whitfield County Schools.
ELECTRIC RATES
On Jan. 1, new electrical rates will go into effect for all electrical customers, reflecting a 4 percent increase. Currently, a residential customer pays 7.45 cents per kilowatt hour (kWh), which will increase to 7.74 cents per kWh in 2010. On an average usage of 1,500 kWh, a customer would see an increase of $7.81. Currently, a commercial electrical customer pays 8.97 cents per kWh, which will increase to 9.33 cents per kWh in 2010. An industrial customer who currently pays 6.06 cents per kWh will see an increase to 6.30 cents per kWh in 2010. Even with these rate modifications, Dalton Utilities electrical rates are still much lower than national and state averages.
WATER RATES
On Jan. 1, new water rates will go into effect for all water customers, reflecting an 8 percent increase. Additionally, the base fee will increase $3. Currently, a typical urban residential bill (based on 7,500 gallons usage) is $16.56. With the new 2010 rate, the same usage will cost $20.28.
WASTEWATER RATES
On Jan. 1, new wastewater rates will go into effect for all customers, reflecting a 6.5 percent increase. Additionally, the base fee will increase $2. Currently, a typical residential bill (based on 7,500 gallons usage) is $23.28. With the new 2010 rate, the same usage will cost $26.30.
After rate increases, Dalton Utilities’ combined residential water/wastewater rates of $48.31 remain much lower than the 2009 state median cost of $69.52 and the national average of $173.03.
TELEVISION RATES
Rising content costs will result in new OptiLink television rates in 2010. Basic cable charges will increase $2, there is no change to enhanced cable (digital package), and an increase of $1 for supreme cable (digital plus movie packages). Additionally, there will be an increase to basic Internet of $3 per month. The price for basic telephone will be lowered.
Source: Dalton Utilities
