Columbus Light and Water’s board will determine today whether to pass on a 1.5 percent rate increase from the Tennessee Valley Authority to customers.
CLW General Manager Todd Gale said TVA’s board approved the increase in August. When CLW’s board meets at noon today, Gale said, it will have to decide whether to absorb the cost or raise its rate.
Gale said CLW will likely pass the cost on.
TVA sells power to CLW, which in turn sells it to residential and business customers. Last year, CLW paid TVA $37.12 million, according to CLW Chief Financial Officer Mike Bernsen.
Gale said the increase amounts to paying TVA about $555,000 more per year.
The change shouldn’t lead to a significant rate hike for CLW customers. Rates have seen only minor fluctuations totaling 9.3 cents per kilowatt-hour since 2010.
“Rates today are about the same as they were,” Gale said. “They fluctuate based on fuel and right now fuel is down. So $100-worth of power in 2010, six years ago, is the same as it is today. You can’t say that about groceries or anything else.”
According to a TVA press release, the price increase should work out to a $1.50 per month increase for the average Valley resident who uses 1,000 kilowatt-hours per month. The increase will take effect on Oct. 1.
Gale said CLW’s base customer charge is scheduled increase by $1.77 to $10.38 on Oct. 1.
He said the increase will give the utility about $200,000 more per year, and it will use the funds to improve rights-of-way.
The CLW board today will also review the water department’s budget for the 2016-17 fiscal year.
An income statement Gale provided to the Dispatch shows the water department is projecting $11.19 million in revenue, with a planned $9.7 million in expenditures.
CLW’s water department has $1.33 million in planned capital expenditures for the fiscal year.
They include $300,000 for water main and meter improvement projects. The department will spend $195,000 to upgrade a 2-inch water main on Second Avenue North to a 6-inch main, as well as $85,000 to upgrade a water main on 20th Street North between Seventh and Ninth avenues.
The budget also includes $240,000 to improve the Riverhill water tank by the Columbus Riverwalk. Gale said CLW has long wanted to re-paint the tank, which is covered in old, peeling blue paint. However, it would cost about $800,000 to remove the old paint and replace it with paint that will last about 20 years. Gale said CLW cannot afford that.
Instead, he said the department will spend $240,000 to get the tank clean and apply an overcoat.
“I’m hoping we’ll get about eight to 10 years out of that,” he said.
Alex Holloway was formerly a reporter with The Dispatch.