For the first time in more than a decade, Tullahoma Utilities Authority is proposing an in-house rate increase for both electric and water customers.
TUA officials announced during the board’s Tuesday night work session that a 2.6% rate increase for kilowatt hour usage and a 27% increase in the customer charge for water customers for Tullahoma city residents.
These rate increases are not the mandatory pass-through rate increases dictated by TVA, but rather increases designed to cover increased costs and help keep the utility company in the black.
This would be the first TUA-proposed increase for electric customers in over 11 years, according to TUA President Brian Skelton. He added this will also be the first time in 13 years that water rates will see a rate increase.
Skelton explained to the board during the April 23 budget work session that the average residential household using 1,000 kilowatt hours will see a $2.60 increase in the monthly bill.
The rate increase is only on total used kilowatt hours, meaning more energy-conscious customers can still keep their bills lower.
“If you’re a lower user, it would be less than that,” he said. “If you’re a higher user, it would be more than that, but on an average 1,000 kilowatt hour [customer], it would be about $2.60.”
There is not an increase on the monthly customer charge, according to Skelton.
Increased material costs and the loss of one of the company’s largest electric customers are some contributing factors to the rate increase, Skelton said.
For example, he told the board, a bucket truck price tag in 2008 was around $72,000. A similar bucket truck purchased last year cost closer to $132,000 – nearly double the price.
The utility authority is also doing more construction on different projects and need to hire an additional lineman position that had not been filled in close to 12 years, Skelton said.
When UTC Aerospace, formerly known as Goodrich Corporation, closed its operations last June, TUA lost a $1.2 million customer. The space is currently only paying “a few thousand a year” compared to the previously higher bill, which means less revenue for TUA.
This increase, if approved by the board, would go into effect Oct. 1 of this year.
When it comes to the water system, the rate is attached to the customer charge – what Skelton called “the minimum bill to have water service at your house.”
There are several different rates for this charge at TUA: an inside-city-limits rate, county-line rate, an outside-the-city-limits rate and a multi-unit rate for apartment buildings.
Each of these rates would change, though not all would increase.
According to Skelton, the customer charge for customers inside the city limits would raise from $5.50 to $7, and the rate for customers outside the city limits would raise from $8.25 to $10.50. Both equate to a 27% increase per month.
The multi-unit rate would also increase from $4.88 to $6 per month, or a 22% increase.
On the flip side, county line customers would see their rate decrease from $10.82 to $10.50 to put them at the same rate as other customers outside the city limits.
The rates for both inside and outside city limits customers are still lower than several surrounding cities, according to Skelton.
“We did a bill comparison just to see how, should the board approve these rates, how we would look compared to other neighboring cities,” he said.
Based on an average residential water customer at 5,000 gallons of water a month, the rate inside the city limits for TUA would be $21.15. The same customer would pay $22.15 in Manchester – a $1 difference – $28.60 in Shelbyville – a $7.45 difference – and $26.13 in Winchester – a $4.98 difference.
For customers outside the city limits, their average monthly charge would be $30.80. Manchester would charge $33.23 – a $2.43 difference. Shelbyville would charge $39.20 and Winchester would charge $44.49, a difference of $8.40 and $13.69, respectively.
The new customer charge rates, if approved by the board, would go into effect in July, according to Skelton.
There was no proposed increase to any part of fiber in the budget proposal, according to Skelton.
However, he cautioned the board that a video rate increase will likely need to be enacted in January 2020.
“That will be based on the increased cost that we have on programming,” he said.
That increase, should it happen, would not affect either the internet or telephone rates – only video.
The board is expected to vote on the budget at its May 28 meeting.
Erin McCullough may be reached at firstname.lastname@example.org.