Archived Story

Electric rates could go up 5 percent

Published 10:59am Wednesday, April 16, 2014

FRANKLIN—City Manager Randy Martin said at the city’s latest council meeting that no one wanted to hear this, but with Dominion going up on wholesale rates to the city, Franklin might have to raise its rates too.

The city is projecting an 8.9 percent wholesale rate increase from Dominion as of March 31. Based on that figure, which Martin said is fluid, the electricity department would recommend a 5 percent increase to pass through the rate to the customers.

As an example, if a customer were to use 1,000 kilowatts per hour, the utility cost now would be $114.41. In July, should council vote this through, that same 1,000 kilowatts per hour would cost residents $119.14, or a difference of $4.73.

Martin said that due to the operating efficiency in the electric department, the cost would not have to go up beyond whatever rate Dominion passes on to the city. He said there have been several numbers sent to them so far, and the latest is the 8.9 percent, which is also the highest. Martin also said the number could go up or down before the new fiscal year starts in July, when the city would start paying the new wholesale rate.

A few years ago, the city had taken a major hit to its electric fund, which is used in emergencies or for buying new equipment outright rather than borrowing to buy. This was due in large part to not passing wholesale power charges and fuel adjustments on to customers in a timely manner.

The low point for the electric fund was approximately $365,000 in June 2012, which was about $1 million shy of the minimum council set for it.

Even after the rough winter, the fund is at approximately $827,000 as of March 31, which is up from $559,000 at the end of February.

Assuming no major storms or breakdowns, Martin projected the fund will be at $1 million by June 30, which would still be shy of the 10 percent minimum by about $300,000.

However, the city had projected that it would take four to five years to get the fund back to the minimum when it started this process back in 2012.

By this time next year, Martin said, he felt confident that unless there are major storm events this year, that the electric cash balance will be at the minimum by June 2015.

“I applaud the efforts of the staff for staying on top of this and doing an excellent job of being efficient in keeping us from having to make any additional increases,” he said. “It’s a credit to the citizens too, as we’ve had improved collections on bills.

“We have not had to raise rates beyond those that we cannot control by Dominion.”

If the city were to not act on the wholesale rate, the electric department would be subsidized by the electric fund. Martin said this would have worse long-term effects than passing the Dominion rates on to the public.

If a major storm were to hit while the cash were low, or some major equipment had to be replaced, the city would have to borrow to pay for it.

“That’s not just poor business management, that would have an adverse effect on the interest rate,” he said. “It can become a vicious cycle.”

In a related matter:

The solid waste collection fee is projected to remain at $39.74 per month for residents, according to Martin’s recommendation.

As of March 31, the cash balance is $392,000, or 28 percent of the budget. Martin said he’d like to see that number continue to grow, as having to purchase multiple garbage trucks at the same could kill that.

He projects the fund to be at $450,000 by June 30. From there, if they stick to the replacement schedule, that fund would be good.

The water and sewer fund is also healthy. He added that the rate has not been increased for several years, and he would not recommend that it go up.

  • DryRain

    FP&L – Cost of 1000 kwh as of 4-1-14

    Basic Electric: 7.98 7.98
    First 800 kwh: 77.02 77.02
    Over 800 kwh: 15.55 21.82
    Fuel Adj.: 11.77 11.77
    Local Tax: 3.00 3.00
    Consumption Tax: 1.52 1.52
    Total Winter 116.84 123.11 Summer

    Compare this with Dominion Powers cost for 1000 kwh.

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    • employee2

      Dominion Winter $108.22
      Dominion Summer $113.92

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  • shocked

    @bigred01- Unfortunately, there are people who enjoy posting stereotypes. They refuse to accept the fact that there are citizens of all races who are not living to their potential and working for what they get.
    Fortunately, we are hardworking citizens who teach our children to do the same. Congratulations on the wonderful paths your children have taken!
    Ultimately, the article was about the electric rates increasing, too bad the poster made statements that deviated from its focus.

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  • concernedcitizen

    @councill The city electric department has a meter and pays monthly for the city’s electric consumption. Stop telling lies. it seems that you need to attend the council meetings and actually listen for once. Also, you are comparing retail prices and wholesale prices for power. Before you speak/write you need to have a clear understanding of what you are talking about. How about go be a write in for a GED course and forget about being the mayor. Maybe then you could understand how the real world operates.

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  • Councill

    Franklin might have to raise its rates too….

    But Dominon said that Dominion Virginia Power’s electric rates went down on April 1 by 33 cents a month for a typical residential customer using 1,000 kilowatt hours. It was the third consecutive decrease since December 1, 2013. At $107.90 per month, company’s rates are 16 percent below national average, 22 percent below the East Coast average and 8 percent below the state average.

    Go to Virginia Electric Rates Update and read the whole article.

    https://www.dom.com/dominion-virginia-power/customer-service/rates-and-tariffs/virginia-electric-rates-update.jsp

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  • bigred01

    I do not appreciate bobs94 comment. We are life long citizens of Franklin. My husband and I have been married 40 years. He retired after 43 years at Newport News Shipbuilding, is a Vietnam Vet and I am still currently working. I have been working for 27 years in the city of Franklin. We raised 2 children, daughter a beautician in the city of Franklin (married with 2 children). Our son in the doctorate program at Howard University in Washington, DC., and is currently a Guidance Counselor in Forestville, MD school system. He is married also, no children yet. We don’t smoke Black & Milds, drink Colt 45, have a police surplus car with rims, tattoos. Our children are productive citizens and are not living a parasitic life. We taught them to work hard for what you want, as we have. We just don’t agree with another increase period. Everyone does not live the way and do the things you commented on.

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    • RWH

      @ bigred01…I feel your resentment to the stereotype and am glad to read that does not pertain to you or your family values. I only wish more were cut from the same cloth as you and would speak up.

      Broken families with misplaced values are not a Black only problem as I am sure you are well aware.

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  • bobs94

    @Councill – Isn’t that the guy that had his electricity turned off for not paying his bill? Electric rate go up. That’s life. If you can’t afford a 5% increase then quit smoking Black & Milds, drinking Colt 45, getting rims for your surplus police cars, tattoos, and having multiple children that end up living the same parasitic life that you are.

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  • whatzup

    Sanford, commenting under Councill’s name, reminds me of the 1966 oldie, Im Your Puppet, the lyrics of which went something like this:

    Pull the string and I’ll wink at you
    I’m your puppet
    I’ll do funny things if you want me to
    I’m your puppet

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  • Councill

    “I would like to add to the comments on this article about the electric rates going up. One of the keys to this whole process is, how is the City purchasing power from Dominion?

    I attended the Council meeting on Monday and they went over the budget overview for 2015. During this process they never said what the rates are that the City is using to purchase the power from Dominion. This means that the profit margins for the electricity is quite large.

    The City purchases power from Dominion at a bulk rate and it is paid at the beginning of each year. The City does not pay a monthly rate like a person would drawing power directly from Dominion. Bulk purchases come with a discount plus the wholesale rates which are way cheaper than retail rates.

    The driving force behind the rate increase for the City is not what Dominion charges at the wholesale level. It is what the City charges us.

    The City put a five year plan in place three years ago to raise the rates to fund the disaster fund; looks like they had to have matching funds to give the State in the event of a major disaster. Once these funds are forwarded to the State disaster fund they issue the State funds to the City.

    The City decided to add charges to the electric bill process to generate a faster growing revenue to increase the growth fund in a faster manner. This fund is required by the State and every Government in the State has to have this in place. The City decided that the citizens’ should bear this cost by increasing the electric rates.

    This information is public knowledge, you must attend Council meeting to hear this information. I was amazed at the process they have put in place but they never showed the profits of the utilities bill.

    The other thing that sticks in my mind, is where is the profit from the utilities are going or what is it being used for. The Mayor should keep the citizen informed on all budget items and the profit that the City gets from services provided. As Mayor I will work to be more transparent with the City funds.”

    Kenneth Sanford

    Write-In Candidate for Mayor of Franklin

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    • employee2

      Just how are they to pay Dominion @ the first of the year when they don’t know how much will be purchased? Dominion bills City Monthly.

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    • spider68

      Councill or Mr.Sanford, whichever one you may be. Do you really think the people of this city are ignorant enough to elect someone to be Mayor, who admittedly cannot handle his finances to the point of having your electricity turned off? Also, if you are the same Kenneth Sanford who as of 3-20-2014 has not paid his property taxes since 2008. Do you think the people of this city are crazy enough to elect you? I think not.
      Mr. Sanford, I would like to offer a bit of unsolicitied advice. Get away from that little clique that you have chosen to join, for they do not know, nor do they care about the damage they are doing to the City of Franklin.

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  • rmcclenny

    Some of you may remember back a few years ago when a large sum of money disappeared from the electric fund and then it magically reappeared with no explanation as to its whereabouts until it was questioned. When council was ask to look into it, it all came to a dead end and all of a sudden, there was nothing to report. ??
    Why doesn’t the city collect that DUI reimbursement money that was passed into law in 2008 and not one cent has been collected. No one at city hall or the police department will make the effort to collect thousands of dollars that would take some of the burden off the tax payer and put it on the offender. City Hall Administration are always talking and never listening.

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  • DryRain

    Never heard that before, FP&L is owned by some Holding Company in Pennsylvania? Sounds like a good story, but not plausible.

    I have heard Franklin Electric was formed in 1892, Franklin County started a Power Company that year, cannot find anything saying that the Town of Franklin started their own power company until the they took over the existing power grid in the 1920′s. Does anyone else have information on this? Could someone be mistaken? I am just saying I can’t find anything on it.

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  • concernedcitizen

    @councill that article you referenced is pure garbage. Who fact checks that? that is the biggest lie I have ever seen.

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    • employee2

      Thank You! Wow, they say privatize the utility and claim it is owned by an outside private company? Who knew? Never let the truth get in the way of a good story.

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  • Councill

    http://thenewjournalandguide.com/community/item/4272-high-utilities-bills-resurfaces-as-issue-in-franklin-council-race

    High utilities bills resurfaces as issue in Franklin council race

    Wednesday, 16 April 2014

    By Leonard E. Colvin
    Chief Reporter
    New Journal and Guide

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    • spider68

      Council—This is some of the most outrageous garbage that I have seen from your little clique yet. It is way past time that you give it a rest.

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  • DryRain

    Electric rates have been going up every 6 months the last rate was this past January, and now they are talking about raising the rates again this soon, before the end of this fiscal year?

    The garbage, water & sewer rates are some of the highest in the State of Virginia, hopefully the water and sewer rates will not go up when the City merges with Southampton’s Waste Water system. Actual we were told the City would save money, guess we won’t know the truth until after the our elections. The City just ask for additional $100,000 to be added to the budget to paid for additional help because of consolidated services, when will it end?

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