Jan. 30, 2013 — Members of Olive Hill City Council agreed Monday to move forward with a rate formula that will make wholesale changes in how customers are billed for electricity.
Under the new structure, residential customers would see a $2.25 increase in their initial fee each month with the cost changing from $6 to $8.25 before any usage costs are calculated.
Homeowners also will see an increase in usage rates. According to figures from an electric rate study conducted by Power System Engineering, current residential customers will see their rates increase slightly from $10 to $10.23 for every 100 kilowatt hours used.
Commercial customers will see a slight increase in their initial cost each month as well, with the fee slightly increasing from $12 to $12.50 before usage charges are calculated.
Commercial usage rates, however, will decrease under the new rate structure, coming down from the current rate of $11 to $10.79 for every 100 kilowatt hours used.
The biggest change in the new rate structure falls to industrial customers. According to the rate study, these customers currently pay an initial fee of $14 and also pay $12 for every 100 kilowatt hours of electricity used.
Under the new proposed rate structure, however, the initial fee would jump to $25, while the usage rate would dip to $10.38 for every 100 kilowatt hours used.
The biggest change for industrial customers, however, would be the implementation of demand rate pricing. Under the rate study’s recommendations, demand charges would initially be set at $2.50 per kilowatt hour.
These rates are based on the cost of providing electricity to the City of Olive Hill under its current cost of operation, which was criticized by the Attorney General’s Office of Rate Intervention.
The AG chided the city for carrying “extraordinarily high” salary costs, which have represented between roughly 20 and 25 percent of the total utility budget in recent years.
The AG also recommended that City Council seek a review by an independent firm to verify all of the utility’s itemized costs, including salary figures.
City Council will consider an emergency ordinance to adopt these figures in a special meeting Friday at the senior center. It will be preceded by a public hearing starting at 5:30 p.m.
Joe Lewis can be reached at jlewis@journal-times.com or by telephone at 286-4201.
