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Posted: January 23, 2011 12:00 a.m.

City to absorb some power costs

 

Georgia has been hit by high unemployment and extreme weather during the past year, and the City of Covington is hoping to give utility customers a little relief.

Newton County residents have experienced two very cold winters and a warmer than average summer, and they’ve used more electricity and gas — and paid for it.

Covington is going to be absorbing $2.3 million of the cost of electricity, which it normally passes through to customers. The city regularly receives reimbursements from the Municipal Electric Authority of Georgia, its power supplier, and it chose to use the money this year to absorb electrical costs.

The money will reduce the power cost adjustment, or PCA, on customer’s bills from 1.97 cents per kilowatt hour to 1.47 cents per kilowatt hour, beginning in February. Because the city’s base electric costs have not changed since 2000, the power cost adjustment is used to pass on additional costs that the city’s incurs because of higher market prices for electricity.

In 2008, electric customers used an average of 1127 kilowatt hours per month. Using those

numbers, Utility Director Bill Meecham said in an e-mail that the average customer would save $5.63 per month, and $67.62 per year, based on the power cost reduction.

Although, the savings are not huge, officials hope they will offset some of the additional costs caused by residents using more electricity during extreme weather.

Mayor Kim Carter said Thursday that the city is also working on a list of talking points to help explain to customers how the extreme weather has increased their bills. The city has not raised its base rates since 2000, but customers usage has increased significantly during the past year.

Adding an airport hangar

The city is planning to add an additional airplane hangar to increase its customer base at the airport. The city is looking to build out from the existing airport apron, but must get the soil tested because a now-closed landfill was located nearby, City Manager Steve Horton said Friday. Wilmer Engineering will perform the soil testing at a price of $4,265.

Pension switch

The city is planning to switch from a 100 percent city funded pension plan to an employee driven 401(k) based system on July 1.

Governments are discovering that employee funded pension plans are unsustainable, and are making the switch to 401(k) plans that the private sector made years ago.

On Thursday, the elected officials discussed whether they should remain on the previous pension plan or switch to a 401(k) plan.

 

 

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