City electric customers can likely expect an average 5.4% increase to their bills starting Oct. 1.
Of that, a 2.9% rate hike is guaranteed, as it will cover an increase on what Tennessee Valley Authority charges wholesale to provide utilities with power. Aldermen will decide at their regular meeting Tuesday at City Hall whether to approve the remaining 2.5%, which Starkville Utilities is requesting to mitigate the effects of inflation.
The rate change would raise the average monthly bill by $5.56 per month, Starkville Utilities General Manager Edward Kemp said at a Friday morning aldermen work session. That is based on the average monthly power bill rising to $108.53.
If approved, it would be Starkville Utilities’ first local electric rate hike since 2009. The board approved water rate increases in 2022.
“We think it will carry us for a bit on our current trajectory,” Kemp said of the increase. “… If we see another dramatic spike increase, then I’ll have to come back to the board at some point, but I would not anticipate having to come back to the board for at least a couple of years.”
TVA plans to increase its wholesale price by 4.5% on Oct. 1 to provide power to the 152 utilities and 56 direct customers it serves. It is also phasing out a 3-year pandemic credit to utilities, which provided Starkville Utilities almost $478,000 annually over that span.
Increases to the customer energy usage charge would cover the TVA rate increase and replace the expiring pandemic credit, Kemp said. The utility would add $1 to the base customer charge – which is the same on every bill – to $18.57 per month to help cover increased operation and maintenance costs.
Kemp said the utility has remained stable, both systemically and financially, and dubbed the proposed increases as “being proactive and not falling behind.”
Ward 2 Alderwoman Sandra Sistrunk, however, encouraged Kemp to be more proactive in the future.
“I’m a big believer that inching it up a little bit annually is much easier to absorb than a big jump in one year,” she said. “I applaud you trying to keep the rates as low as possible, but I think it hurts us in some ways.”
Zack Plair is the managing editor for The Dispatch.
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