The Martinsville City Council took no action on a recommendation to adjust the electric rate’s Power Cost Adjustment (PCA) at its Tuesday, December 12 meeting.
Councilmember Kathy Lawson’s motion to approve the adjustment died for lack of a second.
Mayor LC Jones asked City Manager Aretha Ferrell-Benavides if the council could address the issue at the next council meeting so “everybody could get an opportunity to look into it a little bit more, I think it just came up this week,” he said.
The issue will be discussed at the Tuesday, December 19 city council meeting, “and if we need to schedule briefings with council members, we can also do that,” Ferrell-Benavides said.
City utilities Director Durwin Joyce said the proposed electric rate increase is to 0.0094 per kilowatt hour (kWh), which is about a 5.2 percent increase in the PCA.
Joyce said for example, the rate for 1,000 kWh will go from $152.50 to $160.44.
This change would go into effect on bills issued after January 1.
Joyce said there’s about a $1.2 million deficit compared to the current budget, “which is substantial for us.”
The current increase in the PCA is zero. It was set to zero last year when the base rate was increased.
Joyce said one thing that makes budgets difficult projections is the fact it’s weather-related. While there have been talks about snow, he said temperatures are expected to be a little above normal.
“That affects our sales. Right now, we’re a little behind on sales of where we had budgeted. We’re not close, and we’ll have to see where that goes as the year goes on. One cold month can get you right back to where you thought you were,” he said. “It works well for us in keeping with our budget. But, of course,” customers know the colder “it gets, the more their power bill is and they certainly don’t like that.”
Joyce said several factors are driving the increase including the market uncertainty following the COVID-19 pandemic, economic recovery which decreased demand, and the increase in natural gas prices.
“Just looking at where things stand now, although we don’t have a crystal ball, long term prices are looking a little better. It’s looking better, but it has come down some,” he said.
Joyce said he thinks right now and in the foreseeable future, there is more uncertainty in the market than he has seen in the last decade.
“That can lead to higher prices and price fluctuations, and I think that’s something we’ll have to consider as we move forward, unfortunately,” he said.
Some of the drivers for the market costs include system efficiency, peak demand, access to markets, local climate and risk of natural disasters, and state, local, and federal regulations.
Joyce said the rates charged cover everything, including the purchase of power, the building, financing, maintenance, and operation of the city’s grid.
“The price that we pay for the delivery of our power pays for transmission upgrades and generators to come online to meet added demand,” he said.
In other matters, the council:
*Approved the September 19 joint session with the school board, as well as the September 25, September 26, October 4, October 6, October 16, and October 21 meeting minutes.
*Heard a presentation and adopted a resolution supporting Share the Air.
*Heard an end of the year update from Uptown Partnership.
*Approved an ordinance to adopt the city’s participation in the Commercial Property Assessed Clean Energy (C-PACE) program on second reading.
*Heard an update on expenditures of funds the city received though the American Rescue Plan Act (ARPA) of 2021.
*Heard comments from Ural Harris about the lack of a meeting to get the public’s input and recommendations on what the city should present to the General Assembly and industrial site projects.
*Heard from comments from council.
*Heard about the Santa, Cops & Kids event.
*Approved closing the Martinsville City Municipal building all day on Friday, December 22 for the Christmas holiday.
