City weighs change in billing

Officials said they are taking steps to stabilize the charges reflected on customer bills.
By JOHN W. GOODWIN JR.
VINDICATOR TRUMBULL STAFF
HUBBARD -- City council is considering a return to the old way of doing business in terms of billing for electricity here.
Since 2000, residents in the city have paid for electricity based on a purchase power adjusted formula. The PPA formula averages the cost of electricity and the usage by consumers over a four-year period to determine the cost in the fifth year. Cost and usage figures from 2001 through 2004 were averaged to determine rates for this year.
Officials said the city went to the PPA formula of averages to eliminate spikes in electrical costs at times of the year when residents are using more electricity.
Toward the end of this year, however, there was an increase in what residents were asked to pay, leaving many residents upset and voicing their concerns to council members. Ed Palestro Jr., electric foreman for the city, said the increases were needed to make up for shortages in the estimated bills earlier in the year.
Change in billing
Now, council may do away with the system of averages all together and return to billing residents for their actual electric usage. Council could make a decision later this month.
Palestro said council and the board of control are looking into a number of ways to eliminate fluctuations in monthly bills to residents. Dropping the system of averages, he said, is a start to stabilizing those bills.
"The board of control and I believe this is the first thing we need to do to deal with the fluctuating PPA we saw in 2005," he said. "The cost of power should stabilize in 2006, barring any unforeseen cost, that should stabilize the [bills]."
According to Palestro, a second step in stabilizing the monthly electric bills of city residents will be long-term purchasing agreements for electricity. Council voted Monday to allow legislation to be drawn up for such an agreement.
"We have a chance to buy power now for four to seven years at a fixed price," said Palestro.
Locking into a set rate now, Palestro said, will be good for city residents in the coming years. He said the cost of the electricity is about the same as what the city is currently paying, but that price will go up if it is not locked in now.
jgoodwin@vindy.com