SHELBY — Electric consumers in Shelby could be in line for a bit of a price break.
Information and feedback presented at the most recent meeting of Shelby City Council’s Utilities and Streets Committee is setting the stage for a proposed reduction of the generation charge.
Following remarks by Shelby Municipal Utilities Director John Ensman, legislation is being prepared for Shelby City Council to consider.
* An annual review is indicating the cost of service for the operation and maintenance of the generating units is lower than the current collection.
* In reviewing the generation collections compared to the expenses to operate and maintain the generating units, there appears to be room to reduce the current generation rate.
* A lower rate would reduce the collections to bring the needed revenues to operate and maintain the generators more in line with the expenses.
The current generation rate of $0.0045 last was adjusted in June 2020, he noted.
“Generation rate is one of the components in the energy charge on the electric bill that influences the cost per (kilowatt-hour) kWh,” Ensman detailed. “The rate is designed to cover the expenses for the operation and maintenance of the diesel generators.”
These include labor and associated cost, diesel fuel, testing, EPA permits, maintenance and repairs and more, he reported.
From January 2020-May 2020, a generation rate of $0.0055 brought in revenue of $213,607.65 based on 38,837,755 kilowatts of electricity sold. From June-December 2020, the generation rate of $0.0045 brought in revenue of $250,814.50 based on 55,736,556 kilowatt-hours. In all, $464,422.15 was collected in 2020.
A proposed $0.0035 rate, for example, would lead to a projected $336,750 in revenue while a generation rate of $0.0040 would mean $384,858 in projected revenue among the scenarios presented to the committee. Keeping the current generation rate of $0.0045 would lead to projected collections of $432,965 based on 96,214,411 kilowatts sold in a year.
“If the committee desires to entertain a proposed rate reduction, a recommended rate collection would be to cover approximately or at least 90% of the appropriations for the operations and maintenance minus purchase power,” Ensman said, adding that 90 percent represents a typical year.
In comments at the meeting, committee Chairman and City Councilman Nathan Martin expressed support for the option calling for a proposed generation rate reduction from $0.0045 to $0.0040. That would result in an estimated reduction in projected annual collections of $48,107 when using the average annual kilowatts sold of about 96.2 million, according to data presented.
Martin plans to sponsor the legislation for the reduction of the generation charge to $0.0040.
Ensman detailed that at $0.0040 “the estimated annual savings per 1,000-kilowatt-hours at a residential rate of 50 cents a month is about $6 a year” and that Shelby has about 4,200 residential customers.
“If you look at it on the high end of this, the estimated annual savings for a light industrial customer using 450,000-kilowatt-hours at the industrial rate is about $225 savings per month x 12 months is about $2,700 they would be saving,” he added.
- Flashes compete at BC's Stache Dash
- Proposed building addition emerges as option in Jackson Township
- Shelby boys win Ontario Relays; Lady Whippets finish third
- Boy Scouts lead clean-up efforts near Shelby
- Jackson looking toward road improvements
- Whippets rally in late innings to win 10-7, now trail Ontario by a game
- Two big innings — 18 runs worth — carry Shelby to 18-2 softball win
- Shelby issues coronavirus data update
- Whippets crush visiting Mansfield Christian 22-0
- Apartments struck by gunfire in Shelby
- Shelby man indicted on child pornography charges, feds report
- Fast start propels Lady Whippets in 11-1 rout of Harding
- Lady Whippets finish strong at MVD Tournament
- Ohio COVID cases moving in 'wrong direction'
- UPDATE: 5 displaced in Shelby apartment building fire
- Shelby track teams are second at Perkins Pirate Invitational
- 400 unused COVID vaccines leave Shelby
- Buyer emerges for Auburn and Dowds school sites in Shelby