GALION — The price of electricity for City of Galion utility customers is going down.
It’s not a huge decrease — maybe a few dollars on the electric bill of the average consumer — but it will go down nonetheless, once the legislation to do so is approved by city council members.
“The last three intervals of the PCA adjustment — last February, August and this one — the cost of power we buy has been less the rate we are charging customers,” said Galion Mayor Tom O’Leary. “This is easier and more efficient that actually changing the PCA.”
O’Leary however emphasized that an upward adjustment is likely in 18 to 24 months.
The actual price decrease is just $0.00826 per kilowatt hours used, or less than a penny per kilowatt hour used. The price decrease is the same for residential, commercial, low- and large-power uses. Service charges remain the same for residential ($12) and commercial ($20), power ($100) and large power ($500) users.
Donald E. Gruenemeyer, president of Sawvell and Associates, Inc., which performs the energy audit that results in the PCA (Power Cost Adjustment) two times each year, recommended no rate increase at this time, while admitting an increase in the PCA is likely in the future.
Gruenemeyer explained in a recent letter to Galion City Council the reasons for the change:
“On Feb. 5, 2020, Sawvel and Associates, Inc. was asked to provide the City of Galion an electric rate adjustment to eliminate the need for a negative power cost adjustment (PCA) charge. The PCA is currently set at zero, however there is a PCA balance of approximately $1.1 million that was collected in excess of power supply costs from January 1, 2016 through December 31, 2019. Projected 2020 power supply costs are less per kWh than the power supply costs included in base rates ($0.09826/kWh). This meansthe PCA would need to be a negative chargejust to stop the over collection of costs. To begin returning the over collection to customers, the PCA would need to be further negative. The city has indicated its utility billing software is incapable of charging a negative PCA.”
He also talked about the thinking behind the PCA increase expected in the next couple of years.
“For future years, we project a need for PCA increases to regulate the amount of PCA balance returned to customers,” Gruenemeyer said. “We prepared a multi-year projection of the PCA that anticipates annual PCA increases beginning in 2021 as power costs increase over time. We will review the progress of the PCA balance draw down with each subsequent semi-annual PCA review with a goal of returning most of the PCA balance to customers by the end of 2024. We appreciate the opportunity to be of service the City
There was also discussion about whether city council will decide to continue with an Efficiency Smart Plan that has been used by businesses to upgrade their electric systems and by residents who have been able to get energy efficient light bulbs at a cheaper and given opportunities for rebates on more energy efficient appliances.
The administrators of that plan will attend a council meeting in the future to talk about the benefits of the program.