Power bills' rise is only temporary

Officials said the bills should begin to decrease in two months.
By JOHN W. GOODWIN JR.
VINDICATOR TRUMBULL STAFF
HUBBARD -- City residents are going to see an increase in the cost of electricity over the next two months, but officials say the higher cost will not last.
Ed Palestro, Jr., electricity foreman for the city, told members of council Monday that the city has underbilled customers for electricity most of the year. The underbilling, he said, stems from a system of averages used by the city to determine customer bills.
The Purchase Power Adjustment formula averages the cost of electricity and the usage by consumers over a four-year period to determine the cost in the fifth year. The 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 several years ago to eliminate spikes in electrical costs at times of the year when residents are using more electricity.
Spreading out cost
"This was set up so that the high-usage months of June, July and August could be spread over the entire year," said John Darko, council president. "Unfortunately, this year every month has been high."
The PPA averages, according to Palestro, usually work fine in determining bills, but 2005 has presented some unusual conditions. He said the city's average monthly cost for electricity has risen to $360,000 now from about $228,000 in 2003. He said consumer usage has also greatly increased.
"2005 has been a rough year in the power market," he said. "The cost has just skyrocketed. It is a good formula, but 2005 has been extremely volatile."
Palestro said the increases on electricity bills is what is needed to make up the difference between the volume of electricity customers were expected to use and charged for under the four-year estimation, compared to what actually was used.
Residents upset
Members of council have received numerous phone calls from upset residents. Several residents addressed council about the bills Monday, claiming someone "dropped the ball" in keeping an eye on the issue.
Palestro said that is not the case.
"Nobody dropped the ball. Nobody did anything wrong," he said. "This is just based on the formula."
Palestro said charges should begin to decrease in January.
Palestro said city officials are "weighing options" to determine whether the PPA average system should be maintained or if customers should be billed for actual usage. He said a decision should be made by the end of December.
jgoodwin@vindy.com