- City debates electric rates

Per the BHMG study, modest electric-rate increases need to be implemented by the city to keep Seymour’s electric department solvent and not in financial arrears.

Suggested cost increases per kilowatt hour (kWh) are less than 8 percent in the city’s top-three rate classes in terms of usage — commercial, industrial and residential.

However, the current meter charge, with its name now changed to “customer charge,” will see significant increases to cover fixed costs associated with the operation, equipment and maintenance of the electric department, per the recommendations of BHMG and the consultant who conducted the Seymour study, Verbal Blakey, the company’s chief financial officer.

Blakey said that if the city’s electric rates aren’t adjusted, Seymour’s electric department no longer will be running at a profit in 2026 and will be operating at a significant financial deficit in 2027.

On Thursday, the aldermen reviewed the suggested rate increases in the BHMG study, as each rate class was studied by City Administrator Hillary Elliott, Mayor Alicia Hagen and the city’s four aldermen — Jim Ashley and Darrel “Bub” Wallace from the North Ward and Nadine Crisp and Dan Wehmer from the South Ward.

At the onset of the discussion, Hagen made it clear she wasn’t in favor of the city having the wholesale class for electric rates, since the rate class only includes a single customer, the Seymour YMCA.

“This isn’t anything against the YMCA, because it’s one of our city’s most-valuable assets, but why can’t we just call it what it is?” she asked. “It’s essentially a rate for the Seymour YMCA’s pool, correct?”

Elliott said that was correct.

“The wholesale rate applies only to the indoor pool, not the rest of the YMCA,” she explained.

“Technically, this rate class was created because (the YMCA’s pool) is funded, in part, by the half-cent sales tax for a municipal pool.”

Elliott asked Hagen if she felt calling the rate class “municipal pool” would work.

“That’s accurate,” Hagen responded. “The word wholesale, to me, is just very misleading in our rates and could lead others to believe one group is getting a wholesale rate versus others, when that really isn’t the case.”

All four aldermen agreed to change the name of the rate

Discount for seniors?

South Ward Alderman Nadine Crisp then suggested the city create a new rate class for senior citizens.

“I’m thinking we have a lower rate for our seniors who are, say, age 75 and up,” she said. “Many of these people live on fixed incomes, a lot of the time it’s just Social Security, and even a small increase will hurt them.”

Dan Wehmer, the city’s other South Ward alderman, asked Crisp who would cover the financial shortfall created by giving a lower rate to seniors.

“I don’t disagree with what you’re saying, Nadine, but in this study, the rates are structured to give us an exact amount of revenue to make things work financially,” Wehmer said.

“So, if we give a discount to one group, then another group has to cover that cost.”

He cited an example of a single mother with several children at home.

“She also struggles to pay her bills, but she’s 25 or 30 years old, not 75 or older,” Wehmer said.

“How do we explain to her that her rates are higher due to us giving a discount to senior citizens?”

Crisp said that she’s heard from several residents, many of them elderly, who are concerned about rising electric rates in the city.

“I’ve heard those concerns, too,” Wehmer said. “None of us want to raise rates. But the electric study was very clear. If we don’t adjust them, our electric department is going to go broke. We can either have a small increase now, then raise them by a small amount on an annual basis as our cost of power increases, or we can ignore the study, do nothing, then some future board will have to raise rates by a huge amount just to keep the system from going broke.”

North Ward Alderman Jim Ashley told Crisp that he, like her, was inclined to do nothing.

“But if we do that, then we’re ignoring what we know is best for the city,” Ashley said. “This is the last thing that I want to do. But we really don’t have a choice.”

Bub Wallace, Ashley’s counterpart in the North Ward, said he took the new rates and applied them to his current electric bill.

“My bill would go up about $12 a month,” Wallace said.

“Like everyone, I don’t like seeing any increase, but this is an increase people can adjust to and handle. I figure that my electric bill is a pretty average one for most residential customers. My home is pretty typical here.

“I was afraid that when I figured it, the increase was going to be something huge. And I actually was a bit surprised the jump was just a little over $12.”

New rates discussed

Per the BHMG study, the city’s rates for power per kWh should be increased.

However, those changes are modest.

For residential customers, the suggested rate increase is from 9.8 cents per kWh to 10.52 cents — a jump of 7/10th of a cent.

The increase for commercial customers was suggested to go from 9.4 cents per kWh to 10.5 cents. That increase is 1.1 cents per kWh.

Industrial customers have a suggested rate hike from 7.6 cents per kWh to 8.32 cents — an increase of 7/10th of a penny.

For tax-exempt customers, the suggested increase is only 3/10th of a cent from 9.2 to 9.5 cents per kWh.

And the municipal-pool rate will jump from 6.1 cents per kWh to 7.6 cents, per the study’s recommendation.

The largest increase in electric services, per the BHMG recommendations, is within the city’s current meter charge, which the city officials decided to rename as a “customer charge,” because the new name accurately depicts what it is.

Elliott added that the former meter charge, now a customer charge, is what’s needed to fund the operational of all fixed-cost facets of the electric department, ranging from the monthly billing and collection of bills, to the cost of employees, to the cost of needed electric equipment, ranging from heavy machinery to electric transformers and even poles and wire.

“All of those costs have increased on the material side as much as 100 percent over the past few years,” she noted.

“When we can get transformers, we’re waiting a very long time for them and paying a lot for them. The cost of needed equipment, such as a digger truck, is rising every year. The customer charge is what’s used to fund the cost of simply operating an electric department.”

New meter rates

Per the BHMG study, the customer charge for residential customers will increase from $6 a month to $15.

Wehmer noted that if implemented, that rate would still be less than half of the $1.09 per day charged by the neighboring Se-Ma-No Electric Cooperative to its electric customers, a rate that soon will increase to $1.25 per day.

The commercial rate will jump from $13 a month to $30, while the industrial rate goes from $19 a month to $75.

For tax-exempt customers, the charge increases from $6 to $30.

The customer charge for the municipal-pool class also is at $30 per month.

All of the aldermen agreed that the newly named customer charge, formerly a listed on bills as a meter charge, had to be implemented.

“The cost to keep our electric system up and running is only going to continue to go up, and we have to have the money to run it,” Wallace said.

“The alternative is for us to sell the system, and no one will like that,” Wehmer added. “If that’s done, the city will have to pay a bill on every street light in town, a bill for all of our buildings, such as the safe room, for the lights at the (Seymour) Apple Festival, plus we’d have no workers on our payroll to put them up, and who knows what a private company would charge all of our customers for power, but I’ll guarantee you it would be higher than what the city would charge.”

There were seven members of the public at Thursday’s meeting. Several of them asked questions about the proposed electric rates, including Richard Bell, David Carpenter, Anna Pritchard and Vickie Underwood.

At the end of the electric discussion, Wehmer made a motion to discuss the electric-rate ordinance at the city’s next meeting, which arrives Thursday, March 9.

His motion was seconded and passed 4-0.