Electric rate study planned

By Jonathan Delozier - jdelozier@aimmediamidwest.com



Are Wellington’s electric rates high enough to avoid deficit spending? A study will be conducted this summer in an attempt to answer that question.

A village ordinance states the study was to be conducted by either April of 2015 or when the village’s electric provider, American Municipal Power, began charging $86 or more per megawatt hour.

That cost threshold was recently met by AMP and village manager Steve Dupee thinks the best time to take action is before funds are further depleted.

Approximately $3.2 million in reserve cash sits in the village electric fund. In 2016, it operated at a net margin of $192,000 but that fell to $111,000 in 2017.

Projections for 2018 are back up toward $190,000, Dupee said.

“I do think that, looking at our rate schedules, the range of rates across our commercial customer group needs looked at to see if they’re fairly allocating cost,” he said.

Rates for residential customers now average 11 cents per kilowatt hour with commercial ranging between nine and 19 cents.

Officials are considering adding a “small commercial” rate meant to better differentiate between smaller and larger businesses.

Dupee expects to begin planning the study with a yet-undetermined engineering firm this spring and hopes to have the initiative in full-swing by summer.

He said if the changes do come to pass they’ll likely be put in place late this year or at the start of 2019.

“Of course, if we make any change to our rate schedule it takes three readings by council and then a 30-day period that allows customers to voice their concerns,” said Dupee. “It is the same kind of schedule we saw with changes in our other utilities.”

Last year, village council approved changes to water, sewer, and storm sewer rates.

For water service, the new rate structure mandates a $2 monthly fixed rate for 5/8-inch meters within the village limits, $3 for 3/4-inch meters, $5 for one-inch meters, and $10 for 1.5-inch meters. For meters outside the village limits, 5/8-inch has a $3 charge, 3/4-inch gets $4.50, one-inch will cost $7.50, and 1.5-inch $15.

Usage rates per gallon increased by 5 percent in 2018 and 2019 and another 3.5 percent in 2020.

Residents previously paid $7.75 for every 1,000 gallons of water used and a flat rate of $3.50 per month for storm sewer amenities.

That storm sewer rate increased to $6 per month. However, that rate can rise if a property contains more than 2,900 square feet of structures that cause water runoff such as roofs and pavement.

The fixed water rates are designed to create yearly revenues of $61,638, part of total projected water revenue of $960,638 in 2018, $1,004,738 in 2019, and $1,037,152 in both 2020 and 2021.

Those totals would generate budget surpluses of 31 percent next year, 28 percent in 2019, and 26 percent the final two years of the plan. Surpluses are needed to cover unexpected costs, including recovering from catastrophic events such as fires or burst mains.

Sewer service increases are expected to create $145,740 in yearly revenue from 2018 to 2020. Total projected sewer revenue for next year sits at $1,044,240 and $1,110,240 in both 2019 and 2020 — respective surpluses of 16.5, 20, and 25 percent.

Jonathan Delozier can be reached at 440-775-1611 or @DelozierNews on Twitter.


By Jonathan Delozier