Thursday, December 6, 2012
Citizens speak out on utility rates
By SUE WATSON
Two Holly Springs citizens brought concerns and questions before the mayor and board of aldermen recently concerning utility rates.
First on the agenda was Ivory Seal Faulkner of the Hernando Road area.
His questions included the following.
– “Who is responsible for the city’s high rates for electricity? Alderman Russell Johnson asked what can we do about it, because this is in-house; it’s not TVA (Tennessee Valley Authority),” Faulkner said.
– “Why is it that TVA has been working with the city for three years (on an agreement), but this is the first time the people are hearing of it? What brought it on to not give customers an extension to pay their bills after they are late in paying?” Faulkner asked.
– “Does the Ratepayer’s Bill of Rights (Public Service Commission) conflict with the customer’s rights? Do we really need protection from our board of aldermen and mayor?” he asked. “If we have no rights under the new agreement, is it taxation without representation?”
– “Are we being double-taxed from the budget?” he asked.
Don Hollingsworth, general manager of the Holly Springs Utility Department, fielded the answers.
“The rate you are charged is approved by the mayor and board of aldermen in the budget each year,” he said. “It is published in the paper. The budget includes debt, taxes, and the operational costs of the electric department.
“Holly Springs rates are the highest out of 14 distributors (for TVA) in the area with Tupelo being the cheapest. What causes high rates would take hours to explain. Your minimum bill is $8. If you look at the whole thing, the electric department serves 5 counties and maintains 1,700 miles of power lines. We pay over $1 million in line loss (of electricity) and transformer loss. You cannot compare a city distributor like Oxford with a rural area like ours which is like a cooperative.
“Rates would be in the middle, if we were actually compared with a co-op. Our land area is huge.”
He said the mayor and board of aldermen are stewards on behalf of the utility system, which is governed by federal laws.
“The laws say there will be no discrimination in rate classes,” Hollingsworth said. “You treat every customer the same. The mayor and board have approved the regulations for years.”
Hollingsworth explained that customers who get behind in paying their utility bills may ask for four extensions a year, and that has been in effect since TVA was established.
Faulkner said the public is under the impression that there will be no more extensions.
Hollingsworth said a customer cannot request an extension unless they are late in paying their bill. Disconnect days are also protected on Fridays, before holidays and when the weather is extremely hot or the temperature drops rapidly in one day.
“Those customers who are complaining are ones who have exceeded their four extensions,” Hollingsworth said.
TVA regulates the electric side of the utility while the Public Service Commission must approve water, gas and sewer rates outside a one-mile radius of the city limits, Hollingsworth said. The PSA has no jurisdiction over TVA.
Customers who are current on their utility bills but are sick may ask for a 60-day break on their utility bills if the customer has a doctor’s statement. At the end of 60 days, the entire utility bill for 60 days is due at once, Hollingsworth said.
“People were getting the idea that they couldn’t get an extension, period,” Faulkner said.
DeBerry added, “There have been times when I’ve come back to the utility department – a point of contention – and said, it is OK to have a policy, but you have to be flexible in the parameters.”
The mayor cited the extreme downturn in the economy in 2008 when he said people lost jobs and could not pay their bills.
“You have to have extenuating circumstances, in due fairness, when I have had to call the office manager or manager and say, we need to do this (provide an extension),” DeBerry said.
The mayor explained that tax equivalencies were used to keep property taxes down long before he was elected to city government.
“We are not taxing customers,” he said.
Alderman Russell Johnson said if the city could reduce the tax equivalency, the savings could be passed on to the customers.
“We should be able to reduce the cost of the utility (operational costs). If we reduce this, we could reduce our rates,” he said.
Hollingsworth said the tax equivalency is based on what TVA allows HSUD to collect in tax equivalencies.
Alderman Garrie Colhoun argued that the Fuel Cost Adjustment was running the rates up – that there is no way of getting around the FCA.
Hollingsworth pointed out that the wholesale price of electricity contributes to 85 cents out of every dollar that shows up on the customer’s electricity bill.
Colhoun added that when a customer goes to the gas station, the customer cannot argue about the price per gallon at the pump. The wholesale cost of electricity is a similar deal, he said.
Faulkner added that the citizens need more information about what is going on.
“I think that the more information you give people, the better it is,” he said. “Don’t wait three years to tell us and you get an uproar.”
DeBerry said his whole problem is with TVA’s compliance piece.
“I have no problems with saying you have to have standards,” he said.
Johnson added, “The utility department is our company. Somewhere in the system we have to reduce rates. If it is the tax equivalency, we need to (reduce it).”
After this discussion, Sarah Mays, assistant manager at Spring Garden Apartments, expressed concerns about how residents get services disconnected. She said the apartments give out utility checks but sometimes residents cannot pay their bills because the bills are too high. There are insufficient places to seek assistance, she said.
“I heard this is a welfare program,” she continued. “This is welfare – a government welfare program - Section 8 (housing).”
She asked for extensions when they are needed instead of cutting utilities off.
“I’m trying to be a saint to my people,” Mays said. “Thank y’all for hearing me.”
Johnson asked for special meetings to deal with individual cases at the Garden.
“I think this needs to be discussed in closed meetings,” he said. “I have concerns with the utility checks and in 72 hours a person has to move. I have concerns when a bill gets to that level you mentioned ($3,000).”
Payne also suggested a working meeting. DeBerry said there are already too many meetings to squeeze into people’s schedules. He suggested the meetings take place and problems be discussed at a regular board meeting.
“I think it needs to be monthly,” said Payne.
“Just call one,” the mayor said.
Payne said things need to get done, such as working on getting the system in place where customers can donate a dollar a month to a pool to help customers get help with their bills.
“The dollar on the utility bills we talked about; it never materialized,” said Johnson. “We need to have something in place – to sit down and talk. This $3,000 utility bill did not happen overnight.”
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