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John Thompson

Elizabethton Bureau Chief
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Elizabethton Council OKs electric rate hike

December 8th, 2011 11:58 pm by John Thompson

Elizabethton Council OKs electric rate hike

ELIZABETHTON — By a 4-3 vote on second and final reading Thursday night, the Elizabethton City Council approved a 3.4 percent rate increase for residential customers of the Elizabethton Electric Department. The increase will take effect Jan. 1 and will bring in $1.2 million in additional revenue for the department.
The increase will only impact residential customers. The council was told commercial rate payers are paying an adequate amount to cover costs but residential rates were slightly less than the true costs of providing electricity.
The increase will be in two parts. It will include a $2 addition for customer charge and a $0.00185 additional per kilowatt hour usage. The customer usage increase should provide an additional $545,000 in annual revenue and the kilowatt hour increase should provide $657,000 a year.
The rate increase was approved after a strong and impassioned plea from the city’s new director of utilities, Johann Coetzee.
“I am asking you for your trust,” Coetzee told the council. “I am asking you to keep me accountable so we do not break this pact with our customers.”
Several times in recent months the council has been told the additional revenue was needed to improve cash flow since the Tennessee Valley Authority changed its wholesale billing practices to figure in different rates for the time when the electricity is used. Peak-demand electricity is more costly than off-peak electricity.
But Coetzee included his concerns for the local utility after his promotion to the city’s top utility post two months ago. He reminded the council that the department had not upgraded its substation plan since the 1950s and that there was a need to develop a “cohesive, decisive long-term business continuation plan.”
Mayor Curt Alexander led the opposition to the rate increase. “I am still a no vote,” Alexander said prior to Coetzee’s discussion “The bottom line is this is a tough year and we have already raised our garbage fee, our water bill and a TVA fuel increase. We need to stick to the budget.”
An increase of $5 per month for the electric department had been a part of the original budget, but was defeated at the time the rest of the budget was approved in June.
Alexander went on to say the times were so hard some customers had to make decisions on whether to buy food or medicine or pay the electric bill.
Coetzee said none of the other increases in other fees the mayor mentioned would impact the electric department’s problem. He then told the mayor that he knew what it was like to be poor.
“I didn’t even have shoes for school, my family was so poor,” Coetzee said. He went on to say the electric department was a nonprofit organization and he was not going to build any ivory towers and unlike in earlier years, the electric department would not stockpile a large cash reserve.
Coetzee’s words may have been just enough, as Mayor Pro Tem Sam Shipley and council members Charles LaPorte, Richard Sammons and Richard Tester voted for the increase. Alexander, Nancy Alsup and Bill Carter voted against it.
In other matters, the council approved the electric department’s in lieu of taxes payment for the fiscal year. The department will pay the city of Elizabethton $703,289.97; Carter County $384,575.13; Johnson City $7,175.83; Sullivan County $6,685.60; Unicoi County $4,547.62; Washington County $1,063.48 and Watauga $1,050.15.
The council also approved two change orders to the Covered Bridge renovation project. Despite the increases in costs, the project is still within the grant limits.
Alexander also proclaimed today as Joseph LaPorte Day in Elizabethton. The honor was given to the Elizabethton High School student for his first-place finishes as drum major in all four competitions in which the Betsy Band performed this year, including the state championship.

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