Bob Lewis, general manager of Marietta Power and Water, the city-owned utility, said that excess energy was purchased decades ago.
“The city had signed contracts to take that power back in the ’70s and early ’80s, and they anticipated that they were going to grow at a higher rate than they grew, and then you look at what has happened to us over the last five to seven years in Marietta and where we are today,” Lewis said. “We got way more than we need to meet the needs of the city.”
Of the 352 megawatts the city owns, 73 megawatts are surplus, Lewis said.
“Think about all the load that we’ve lost in terms of none of the redevelopment projects have been built, or I guess pieces of a few of them have been built,” Lewis said. “We’ve torn down between 1,700 and 1,800 (housing) units in the city, and so what’s going to replace them and how long is it going to take? Since we’re not growing, we continue to have that surplus, and that’s what we’re trying to do is to sell it.
Lewis has made two proposals to the City Council that involve selling 57 of the 73 megawatt surplus.
He is studying how much money that would bring the city. Mayor Steve Tumlin points out the city could have trouble selling off the energy in the current market, or it may not make sense to sell when the price is at market bottom.
Energy use for existing Marietta Power customers is down by 10 percent, Lewis said.
With the closing of Lockheed’s F-22 line, Marietta Power loses about $500,000 a year, for example.
“We are now looking at flat growth rates that were going to be flat for a number of years into the future,” Lewis said.
Tumlin said more years than not, owning a utility has been good for the city.
“It’s had a doggone good run,” he said. “Having a healthy utility for all these years has kept Marietta’s property taxes low.”
Tumlin is referring to the $11.5 million annual transfer Marietta Power and Water makes to the city’s general fund.
“Without that transfer, our property tax would be the same as everybody else’s,” he said. “We are greatly helped by having a partner that is a moneymaker, and that’s why this is even more scary. It has never been a burden, and I think it’s a long way away, but we have to be careful.”
But with the excess energy and the environmental regulations from the federal government, Tumlin is predicting a 4 percent increase every year for the next five years.
“The easiest thing for folks to understand is yes, they could be looking at 4 percent a year for five years,” Tumlin said. “Just go ahead and lay it out there. But we’re going to look at every way we can to mitigate that, whether selling excess capacity, cutting costs at the city and Board of Lights and Water level, but most of our expenses there are what we pay other vendors for sewer, water and electricity.”
Were a rate increase to occur, it would be voted on in December and go into effect in January.