Explanation
BACKGROUND
This ordinance authorizes an increase in electric rates effective January 1, 2027 for the Division of Power and amends Chapter 1163 of the Columbus City Codes, 1959.
The Division of Power provides electricity services to approximately 19,000 customers, and maintains approximately 60,000 street lights throughout the City. The Division of Power purchases wholesale power for its customers; the Division does not generate any electricity. The Division of Power’s closest local competitor is American Electric Power (AEP).
Since 2024, the Division of Power had not raised rates for the majority of their customers for over ten years. In 2024, the Department of Public Utilities conducted a financial study that included a revenue needs assessment, a rate competitiveness assessment, cash reserve level evaluation, and a capital investment needs analysis. The study found that existing revenues are not sufficient to fund future costs. The adjustments in rates are from the study's findings and result in electric service rate increases across all residential and commercial customer classes.
Such changes to customer classes will allow the Division of Power to remain competitive with other public and private utilities and provide the additional revenue to invest in its infrastructure. In 2024, the Department of Public Utilities and City Council felt that to relieve rate increase pressure on residents and businesses that residential rates could be phased in over 5 years and commercial rate increases could be phased in over 3 years. Year 3 of this plan will begin in 2027; however due to commercial rates exceeding its local competitor, only residential rates will be increased for 2027. For residential customers, in 2027, depending on rate class, they will see a new monthly bill increase between $7.86 - $11.90 per month, or roughly $94.32 - $142.80 per year.
The proposed rate configuration for 2027 recognizes that power charges disproportionately affect...
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