MUNICIPAL UTILITY Power play by city gets a plug

The city likely will do the study even if streetlight costs don't spike.
By ROGER G. SMITH
CITY HALL REPORTER
YOUNGSTOWN -- City administration wants to study the possibility of creating a municipal electricity system.
City council's public utilities committee is recommending the study. Full council approval would be needed.
A study would take about six months to determine if a move would be economically advantageous, said Carmen Conglose Jr., city deputy director of public works.
If so, the city would buy all of Ohio Edison's equipment. The city then would distribute electricity to all residents and businesses, he said.
A move to city-operated electricity would be two years or more away, said Finance Director David Bozanich.
Potential increases in streetlight costs are driving the exploration.
Soaring cost possible
Starting next year, there is a chance the city's annual cost for operating streetlights could increase to more than $2 million, Bozanich said. The city pays about $500,000 a year.
Ohio Edison is dropping a statewide program at year's end that has provided cheap electricity for streetlights the past 15 years, said Paul Harkey, the utility's area manager. The utility can't afford to keep offering the low rate, he added.
The cheap rate was about 3 cents per kilowatt hour. In exchange, communities handled chores such as putting up streetlights. Communities not in the program pay about 16 cents per kilowatt hour, but Ohio Edison handles work related to streetlights.
It's unclear at the moment what rate Ohio Edison will charge or what options it will offer municipalities for 2005, Harkey said.
Bozanich said the city can't afford to see its costs jump by more than $1.5 million just for streetlights next year if Ohio Edison resorts to the 16 cents per kilowatt hour rate. The city already is trying to fund $500,000 in arbitrator-ordered raises for police officers next year, he said.
"Between these two costs, we're definitely into layoffs," Bozanich said.
Rising expenses
The city's expenses are rising at 4.5 percent annually, but revenue is rising about 3 percent a year, he said.
Bozanich said the city likely will do the study even if Ohio Edison charges close to this year's rates for streetlights.
The city hasn't explored municipal electricity before. The topic hasn't been an issue until now, he said.
"We're going to give it serious consideration," Bozanich said.
Carol Rimedio-Righetti, D-4th, the utilities committee chairwoman, said a study shows the city is doing what it can to keep costs down.
There are several potential benefits of a municipal system, he said.
Rates likely would be lower because the system wouldn't need to produce dividends for shareholders, Bozanich said.
Management options
The system would be managed locally, he said. The city would consider contracting out day-to-day management, however, he said. Such a decision depends on employee costs, he said.
The city also could offer more competitive rates to businesses than Ohio Edison, Bozanich said. Electricity costs are a prime factor in where businesses locate, especially manufacturers, he said.
rgsmith@vindy.com