March 27, 2014
A four-hour board of aldermen meeting last week was dominated by utility discussions and complaints.
Holly Springs Mayor Kelvin Buck opened discussions by saying he and aldermen have received “quite a few calls relating to utility bills.”
The mayor played a news story about the city of Knoxville, Tenn., and its problems with high electricity bills due to the unusually cold winter.
“It outlines what we are trying to do,” he said, “then we will go into discussion.”
The National Public Radio news story highlighted how:
• high heating costs affect low-income residents.
• the coldest January since 1985 in Knoxville was this winter.
• those living in old homes suffer the most due to poor insulation in these homes.
• drafts around windows and doors and poor insulation drive up utility usage.
• the elderly, disabled and families with children sometimes are forced to choose between having heat or paying their rent and other bills.
• the waiting list for assistance with bills in Knoxville was 3,000 families.
• the City of Knoxville received $6 million to insulate 1,500 houses. However the repairs would take 15 to 20 years to save enough energy to pay for the cost of repairs.
• the shoddy workmanship and fraud in the grant program wasted funds, according to Jason Estes with the City of Knoxville.
“There are a couple of points I want to make,” Buck said.
“One, there is nothing unique to Holly Springs, because everybody knows it’s been one of the most difficult winters in a long time.
“Second, we have brought on a customer service liaison. Third, we try to help you, but we cannot pay your utility bill.”
Bill Duke and John Malone, two representatives with TVA, returned to the board room to answer questions about how rates are compared with other distributors across the state. TVA has 28 wholesale customers across the state, Malone said.
He said TVA compared the increase in customer bills over recent decades and over two winters prior to the 2013-2014 season.
Summarizing his points, Malone said:
• the last two winters would be classified as mild winters, while this one would rate as a severe one.
• this winter is a 40-year event for TVA in terms of customer demand.
• the month of January, daily energy usage as compared to historical data shows 2013-14 had five days that were in the top 10 for cold weather days. Four days were in the top 10 spot as far as demand.
“That’s what is going to cause your heat bill (to rise),” he said. “This year the envelope did not recover after a night low. If you get in the single digits in Memphis and Knoxville, that will put a lot of demand on the system.”
• customers can improve their envelope (insulation over and under the home). Do not leave the storm door open or a window open and expect to not use more energy.
• if light can be seen around a door or window or if cold air can be felt around a window, the envelope is leaking. Insulating cracks can lower the heat and cooling costs.
• wear more warm clothing and layers instead of turning up the thermostat on cold days and nights.
• TVA understands the customer’s pain. TVA works to provide affordable rates, Malone said. TVA can advise customers on how to conserve power and lower their bills.
Don Hollingsworth, general manager of the Holly Springs Utility Department, said HSUD is looking at the rules and regulations to see if it can help customers by spreading out their payments over three months.
“But the problem is, don’t get two months behind then come ask for help,” he said. “This winter is hard on us, too. Just because we sell more power, does not mean HSUD makes more money.”
“Don’t wait until they come cut you off, because there is a fee associated with that,” he said. “The only thing we can’t do is pay your bill.”
Buck said the utility will correct its mistakes when meter reading and other mistakes are found.
“Nobody is here to try to stick you with a big utility bill,” he said.
Alderman Bernita Fountain asked when a new 12 months starts for four extensions the utility gives a customer a year.
Hollingsworth said the year begins with the customer’s first extension that is given and goes 12 months.
Alderman Sharon Gipson asked TVA for copies of what the power provider charges the other 27 wholesale customers in Mississippi.
Malone said most of its customers use a modified time-of-use rate structure, the rate structure Holly Springs chose. He said the rates between the three rate structures TVA uses do not differ very much but the modified time-of-use seems to be the most favorable one by its wholesale customers. Once a year, a distributor or cooperative on TVA’s system can choose to keep its rate structure or change it, he said.
Gipson asked to see rate structures for both kinds. She also said the previous board and mayor may have set a policy of payment arrangements that this board may want to repeal.
“Looking at the city internally, TVA is a business and we have a business to look out for – our business,” she said. “We have so many things going on in the city and trust in dealing with departments (is an issue).”
Gipson suggested the city should have an audit to see what it is doing. She thanked the HSUD ladies for their good work with customers.
She said employees are trying to keep up on cut-off days and described the environment on those days as “chaos almost.”
Buck agreed the city should review the way it handles problems at the utility.
“Your point is well taken,” he said.
Alderman Tim Liddy asked Malone if the fact that HSUD is spread out over miles and miles of rural areas, as compared to the compact nature of big cities, makes a difference in the rates it charges.
Malone said when it does a snapshot to compare usage between these big city and rural distribution systems, they compare the cost to heat or cool a 1,000 kilowatt-hour home in both environments. He said Holly Springs customers pay rates that “fit in the middle of the pack.”
Holly Springs customers’ bills for a 1,000 kilowatt-hour structure may be $10 higher or $9 or $10 lower a month than surrounding areas, he said.
Liddy asked if there are any common ways that communities provide help such as the way Memphis does.
Malone said they have a larger customer base, so Memphis has a more successful Plus 1.
Buck said Northeast Mississippi Community Action gets some federal dollars to help customers, but the funds are very limited.
Hollingsworth said the Department of Energy has lots of block grants for large cities to offer energy audits of homes.
He said the rates, such as monthly fuel cost adjustment rates, are driven by the peak demands.
“There are 720 hours in a month and if somewhere in that month everybody uses a lot of electricity at once, it drives the cost up. You pay a premium for that whole number. On moderate days, you may not see that pattern.”
“Customers have to share in that cost,” Buck said.
Hollingsworth said the $500,000 HSUD paid out for the Fuel Cost Adjustment in February was passed on “in a straight flow-through to customers.”
Gipson asked how the utility bill is calculated.
Hollingsworth said CSA takes the meter readings and computes each customer’s bill of each of the utilities – water, sewer, gas, and electricity – the customer uses.
Gipson asked how often the meter is read. If readings are not spread uniformly, a customer may have a high bill one month and a lower one another, just because the number of days logged on differ.
She said aside from what the utility is doing to work with customers, there may be other factors that cause a variability in a bill.
Alderman Mark Miller said when the smart meters are installed, the meter will be read on the same day for each person – that is every 30 days instead of maybe 28 days one month and 34 days another month.
Gipson said customers need to know how to read their own meters and compare what they see with what the meter reader shows on the bill, so the customer can have confidence in themselves that their meter readings are correct.
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