At this point, with all the conflicting statements from City officials, I am sure the citizens would like an update regarding the electric rate overcharging and the electric rate audit/refund check ballot issue.
To refresh everyone’s recollection, initially the City’s position was that there was no overcharge for electric, then it was that there was an undercharge, and lastly it was that there was an overcharge but it was only $231,000. Our group disputes that amount and estimates that the overcharged amount will be at least $4 million.
And who could argue against an audit? We are looking at roughly $100 million or more in electric rate revenue during the period in question. It is just a minor cost of doing business to have an audit to verify that the City has been ‘in compliance’ with its own ordinance and has been properly billing its electric rate payers.
If the City were honest about their claims that electric rate payers were properly billed, then they would welcome an audit. But now, the City is stating ‘where will we get the money’ to pay this $4 million back to electric rate payers. Now, that in itself, is a very interesting question. Why would the City even be concerned about paying $4 million back to the electric rate payers, if electric rate payers were properly billed as they claimed?
But what about the question ‘where would the $4 million come from’? The answer is that the Electric Fund currently has a $6.6 million balance. And how did that balance grow to such a large balance – magic? No, the City was not following its own electric rate ordinance (Ordinance No. 2005-17) causing electric rate payers to be overcharged. So, the Electric Fund balance will cover a $4 million refund to overcharged electric payers, and the Electric Fund should as it grew to that extent due to overcharging electric rate payers. But the Mayor has other ideas, as the Mayor wants to use that excess Electric Fund balance to subsidize rates for the City’s large power customers.
Tuesday night, City Council passed the new electric rate structure, giving rate reductions to power and large power customers and a rate increase to residential customers. Residential customers using 500 Kwh per month will see a 10% increase in their electric bills and residential customers using 700 Kwh will see an 8% increase. Many residential customers were already struggling to pay their City utility bills, and this will only make it worse.
And as for the President of the Chamber of Commerce supporting the new electric rate structure, giving large power customers reduced rates, I would like to make a couple of comments.
Companies in Galion and companies wanting to relocate to Galion want (1) competitive electric rates, (2) stable electric rates, and (3) reliable power. These electric rates that were just passed by City Council are not stable due to the high cost of PSEC power (71% of the City’s baseload power requirement). With sophisticated companies assessing the City’s power sources and costs, they will be making relocation decisions based on far more than current short-term electric rates. And as for reliable power, the City has more power outages than you can count (my home had two brief power outages just within the last week). Companies need more than short-term rate reductions from the City of Galion to stay in or relocate to Galion, and the City’s recent ‘teaser rates’ for large power customers are not going to fool any company for long.
Our ballot issue is all about holding the City accountable. Electric rate payers were clearly overcharged; and very simply that overcharged amount needs to be refunded. Our ballot issue would require an audit of the City’s electric rates and would put refund checks in the hands of every electric customer that was overcharged — large power customers and business customers and residential electric customers.
It’s time for change in the way the City of Galion operates its electric utility. Our ballot issue is just the first step in holding the City accountable to the citizens of Galion.