TIPP CITY — At a recent meeting, Tipp City council discussed a review of the city’s electric utility rates.
According to Finance Director John Green, the city’s rates are not competitive with other area providers, monthly customer charges are inadequate and the city’s power cost adjustment is too high.
“This shows Dayton Power and Light is, on the commercial and industrial side, much, much, much cheaper than Tipp City,” Green said, referencing a study performed by Sawvel and Associates. A typical monthly bill for an industrial customer in Tipp City could be about $295,135, compared to $191,421 for an industrial DP&L customer using the same amount of energy.
Green noted that the city’s rates are not covering the costs they’re meant to cover.
Fixed monthly customer charges have not been adjusted since 1991, Green said. Those are set at $4 per month, which is much lower than surrounding communities. Piqua, another AMP community, is set at $15 per month.
The study suggested that the fixed monthly customer charge should be approximately $16 per month for residential users, but recommended raising the rate to $10 as a midpoint.
On the other hand, the city’s power cost adjustment is “really a lot higher than it should be,” Green said.
The power cost adjustment is dependent on energy sales and recovers the difference between the fixed rates and the actual power costs over a rolling six month average. It was last reset in 2009 and exceeds .05 cents per kilowatt hour.
If the customer charges go up to $10 per month and the power cost adjustment is reset, the average residential user would see little change to their electricity bill, Green said. Some users could see a slight decrease.
Mayor Joe Gibson asked why the city shouldn’t leave its rates the same.
“The way I look at it, it’s only $4,” he said. “That to me is real competitive. That means we can say to people, ‘Look how cheap we are, please come here,’ residential-wise, at least.”
Green said the low rate is not covering what it should.
“The three or four largest companies in town are subsidizing the rest of the customers to keep us artificially low,” he added.
In other business, council accepted a donation from the Tipp City Rotary Club to be used for two new sycamore trees. The trees will be planted along the bike path between Kyle Park and Canal Lock Park in honor of two past club presidents, Bryan Stewart and Brad Vath. The Rotary donated $850, which was accepted by Mayor Gibson.
Reach Cecilia Fox at email@example.com.