Consultant: $4.3 Million Rate Hike Would Impact All Electric Customers
A proposed amendment to Cartersville's electricity ordinance would result in a 10.8 percent rate increase, disproportionately affecting industrial customers who provide jobs, according to an energy expert hired by local manufacturers.
Some of the largest employers would be among the hardest hit in a proposed change to Cartersville Electric System's rate structure, a consultant hired by local manufacturers says.
The city council Thursday delayed progress on the measure they say would reapportion costs to produce electricity among various classifications of customers based on the results of a 2011 study, The Daily Tribune News reported.
"What [the manufacturers] are trying to do is take their increase, and spread it over the residential and commercial customers," Director David Myers told Cartersville Patch earlier this month.
Jeff Pollock, who was hired by local manufacturers to review the city's rate and cost studies, said the plan to increase rates by an average of 10.8 percent would affect each customer class, but disproportionately hit large power users, and result in an additional $4.3 million across the board.
"All consumers will experience higher rates. The industrial consumers will be among the hardest hit, with increases 50 percent above the average," Pollock said in an email. "Because Cartersville’s current electricity rates are already non-competitive (and more on par with high cost states like California), placing a disproportionate share of a rate increase on industrial customers is both counterproductive and will harm the city’s reputation as an 'industrial friendly' environment."
While the city says the largest increase to a class of customers would be less than 2 percent, Pollock says the proposed ordinance amendment is flawed because some fixed power costs, which comprise 70 percent of total power costs, are measured on a variable basis.
"This results in over-charging customers with round-the-clock (high load factor) operations," Pollock added. "The industrial customers are asking that the council consider correcting this problem and has proposed an alternate ordinance to address this issue. Thus far, city officials refuse to consider these alternatives."
City officials are continuing individual discussions with local manufacturing companies, according to the newspaper.
"The city of Cartersville does not agree with Mr. Pollack’s statement which was publicly released earlier this month," Mayor Matt Santini said in a statement. "It is careless and damaging to the community. We continue a dialogue with our power customers in finding the ‘best’ option which will serve all residents and businesses of Cartersville."
Santini has said jobs are one of the city's top priorities. Its most recent move aimed at facilitating economic growth and development is property tax breaks for businesses holding inventories. With Cartersville's urban redevelopment plan and other incentives, leaders hope to help revitalize industrial areas affected by layoffs, reductions and closings.
But an electric rate hike would stifle job creation because the costs to operate in the city are escalating faster than recovery from the recession, Pollock says. He adds unfavorable electric rates penalize existing industries that provide jobs and make the city less attractive to new business.
Bartow County’s unemployment rate rose to 9.9 percent in January but was down almost 2 percentage points from a year earlier.