Residents and businesses could see a slight rate increase on utility bills if LaGrange council approves the proposed 2014 MEAG Power budget.
City Manager Tom Hall said January was a good month for utility sales because of the cold weather.
“Utility bills are high right now for folks so I’m a little sensitive about that,” said Hall. “But in the upcoming months, we’re gonna need to address how we’re gonna deal with these additional costs because they are real. Basically our costs are going up substantially and although our costs are changing by $225,000 a month or so in additional fees, we had a good month in January.”
In a report presented to council at Tuesday’s work session, Utility Director Patrick Bowie said the increase in coal costs is causing MEAG and many electric companies to increase their rates.
“Just like any business when your raw material cost goes up, you have to raise prices,” he said. and our raw material is our electricity that we buy for the customers.
With the proposed budget, Bowie recommended that the City passed $1.3 million of the projected $2.6 million increase in power supply fixed costs for 2014. If the $1.3 million budget passes, there is a proposed 4 percent increase to the base utility rate, but customers should only see a 1.3 percent overall increase in their bills, assuming MEAG’S projected $.8 million future decline in fuel costs.
The average residential bill would go from $110.94 to $112.37, about $1.43 increase or a little less than $2 for the average customer.
“We’ll still remain significantly below Diverse and Georgia Power, our two local competitors, and that’s important to the consumers that we stay the cheapest supplier in town,” Bowie said.
Average monthly residential utility bills would be 13.6 percent more for Diverse Power customers at about $127.67 and 10.4 percent more for Georgia Power customers at $124.09 per month on average with the city’s proposed rate increase. For general service electric customers, Georgia Power would plummet by 21.6 percent more than the city’s rates and Diverse Power at 4.5 percent more.
Georgia Power too is increasing its rates due to coal-related improvements, with a 2 percent increase to utility rates in 2014 and 3 percent in 2015 and 2016, mentioned Bowie.
Over the next couple of decades, cost is expected to decline, with a few occasional increases, said Bowie. The other half of the $2.6 million is expected to be made up over the next couple decades largely due to the anticipated completion of Vogtle, an electric generating plant.
Council is expected to consider the increase by April 1.