Amherst rolls back electricity rate increases

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Jason Hawk | Amherst News-Times
Mayor Mark Costilow and law director Tony Pecora announce that Amherst will roll back electric rate increases introduced this past spring.

JASON HAWK
EDITOR

Facing questions over an unpopular electricity cost increase this past spring, the city of Amherst will “err the side of caution” and roll back the rate, said mayor Mark Costilow.

He made the announcement Monday to city council’s executive committee, saying it was “the right thing to do.”

Homeowners will get credits on their January bills — a residential customer averaging 750 KW per month for the past eight months could see a one-time credit of $45.

Costilow said utility rate increases aren’t being shelved but he plans to approach them in a different way. Increases could have been done more gradually, he conceded.

After Jan. 1, the city will reassess electric rates and determine a course of action, the mayor said.

Electrical department operating costs have steadily increased over the years and rate consultant John Courtney said in 2017 that Amherst needed to raise its prices.

He cited the results of an electric rate study presented last September to city council, the first such rate study for the city in 33 years.

Safety-service director John Jeffreys raised electric prices by proclamation without council action and the new rates went into effect in April.

Home power bills increased by $2.50 and similar bumps were expected in 2019 and 2020.

Residents grew angry in the following months as they saw bills climb, especially with summer air conditioning costs.

Some residents complained to city council about the increases in September — Robert Eiborg, for example, who said his power bill climbed from $55 to $110 per month.

At the same meeting, Jim Bulloch, who lives across the street from city hall, challenged the administration’s legal authority to raise rates without a council vote.

His questions led to a review by law director Tony Pecora.

Officials believe Amherst “is within its constitutional rights and duties to increase city-owned utility rates,” according to a written statement from the city furnished Monday.

But Pecora said Bulloch’s digging into Amherst Codified Ordinance 919.05 did give them pause. It requires the electric department to have no less than $350,000 in its accounts; if the balance dips below that amount, the safety-service director has to raise rates to stabilize the accounts.

The ordinance doesn’t say under what other circumstances the rates can be raised.

“Waiting for the account to drop below $350,000 before it raises rates would be financially irresponsible and likely lead to the shuttering of the department,” said the city’s written statement. “Simply put, the ordinance is antiquated and does not meet the present day requirements of the department. The ordinance needs revision, if not a complete overhaul.”

Pecora said the Ohio Constitution still allows cities to address rates as the it finds fitting and appropriate.

The rate dispute has nothing to do with new meters installed this summer, according to Costilow.

Resident complaints this fall focused on the meters as a reason bills had increased. Extensive testing of both new and old meters show them to be accurate, according to date provided by the mayor’s office.

Some meters were tested by utilities workers in nearby Oberlin. An independent company was also hired to test about 50 meters, including residential and some industrial customers.

The tests found the meters to be accurate to within 0.02 percent, well within the two percent deviation accepted within the utilities industry.

1 COMMENT

  1. The Amherst Codified Ordinances are pretty explicit as to when and whom can increase the electric rate. There is only one specific instance when the administration can increase the rate, and then by no more than 5%. My question to the Mayor was, under what authority he increased the rate, since the ordinance specifically vests electric rate increases to City Council.
    CHAPTER 919
    Electricity
    The provisions of this chapter were derived from resolutions enacted by the Village Board of Trustees of Public Affairs under the authority of Ohio R.C. 735.29 which provides that the Board shall manage, conduct and control the electric light plant. Upon achieving City status, the management of the electric light plant was transferred to the Director of Public Service under authority of Ohio R.C. 735.02. The authority to fix electric light and power rates to be charged consumers of the City owned electric light plant is vested in Council under the provisions of Ohio R.C. 715.03 and 715.06.
    This has been in effect since Amherst went from a village to a municipality.
    I hope in passing a new ordinance, Council does not give up their vested power to control electric rates. I do understand that electric rates fluctuate, but that is the purpose of the PPA, to make up for extra charges when the city has to purchase additional electricity above the contracted amount with AMP Ohio.

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