Official says excess energy a reason for talk of rate increase
by Jon Gillooly
April 05, 2013 12:13 AM | 2311 views | 8 8 comments | 4 4 recommendations | email to a friend | print
One of the reasons the city of Marietta is looking at 20 percent electric rate increase over the next five years is because it owns too much energy, city officials say.

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.
Comments
(8)
Comments-icon Post a Comment
Be Careful
|
April 05, 2013
This whole mess is worse than silly.

But this is what happens when people get elected who have nothing more than a high school diploma and have never held down a real job.

They have no idea what they're doing and companies who know how to make money pull the wool over their eyes. Then they have lame non sense excuses to us citizens.

But, it's all our fault.

In Georgia, incumbants are reelected 77% of the time. Who are the fools? Them or us voters?
John Galt
|
April 05, 2013
It seems that the previous five-year strategic planning process failed to put MP&L on the correct footing and now they want customers to pay the price. One has to wonder if the strategic planning for the next five years is correct, or is this just an excuse for a money grab?
Follow money
|
April 05, 2013
The bigger the rate the bigger cut the city gets to keep.
EMC member
|
April 05, 2013
Cobb EMC recently cut rates. My bill is lower and I've never heard them claim they have "too much" electricty. Glad I don't get power from Marietta.
No way
|
April 05, 2013
Wouldn't it make more sense for the city to stop taking 11.5 million dollars from the ratepayers and to make 11.5 million in cutbacks in the city budget until it can sell the excess power. That way the customers will not get hit by a massive increase which will only drive customers to use less electricity thereby raising rates more than 20 percent. At the current rate and in thi seconomy a 20 percent increase is totally unacceptable. If a 20% increase happens expect the council to be looking for new jobs!
anonymous
|
April 05, 2013
Yes, and you can bet that if we did not have enough and the supplies were short the prices would be going down. Riiiight! Somehow, whenever government is involved, we will always pay more.
Term Limit Clowns
|
April 05, 2013
If this (yet another) massive blunder isn't an airtight case for term limits in city government, I don't know what could be.

We need to get our perma-clowns out of office so the City of Marietta can move forward.

Where is that City of East Cobb someone mentioned? It's the best idea I ever heard for moving City of Marietta's "leaders" out of the 1970s. The City residents left the 1970s decades ago!
Lower the rate?
|
April 05, 2013
Lower tax rates mean increased tax revenue, right? That is what Mitt and Sarah told me.

How about cutting the eletricity (aka property tax) rate to the point where it would attract people to the city?

How low could we set the rate to sell all the power? Wouldn't that be a far better move than raising the rate and tossing a bunch of power into the garbage can?

We need better leadership. Seriously. Our current "leaders" talk about raising rates to further reduce the number of people moving here, and try to keep the ALzyric at the Strand.

What does Philip want now, to replace the perennially losing mediterranean restaurant next to the Strand with a denture and hearing aid store?
*We welcome your comments on the stories and issues of the day and seek to provide a forum for the community to voice opinions. All comments are subject to moderator approval before being made visible on the website but are not edited. The use of profanity, obscene and vulgar language, hate speech, and racial slurs is strictly prohibited. Advertisements, promotions, and spam will also be rejected. Please read our terms of service for full guides