Hamilton City Council approved the rate increases last week with a 6-0 vote. Vice Mayor Carla Fiehrer was absent from the meeting.
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Utility officials had proposed another 5-percent increase to the city’s Public Utilities Commission, starting with Dec. 1, 2019, bills, but that request was not forward to the council.
Some city customers were surprised this summer by high utility bills, suspecting the city must have made a mistake because the bill amounts were significantly higher than earlier months of the summer. The city explained the higher bills were because temperatures were higher in July and August than prior months.
Here are actions that led to the decision to increase rates:
- The December increase will help avoid a projected $800,000 operating loss in 2018 and also help the city meet its debt-pay requirements. The 2018 increase will help "fully fund the gas system annual capital improvement expenses of $1.7 million" that are needed for such things as replacing 2 miles of gas mains per year, as well as valves, meters and other equipment, according to a report from Jim Logan, the city's executive director of infrastructure. The city has 283 miles of gas main, 23,597 gas mains and other distribution equipment.
- When Mohawk Papers, which had been the gas utility's largest customer, closed in 2012, with it went 5.2 million Ccf (hundred cubic feet) of annual sales, and about $3.6 million in annual revenues. Also, sales to other customers have slid from 26.6 million Ccf in 2014 to an estimated 20.6 million Ccf this year — about 8.6 percent a year — "largely due to warmer-than-normal winters and customer efficiency," Logan's report states.
- On the cost-saving side, the city negotiated a new natural-gas supply contract, and struck a five-year deal with the company Constellation for $3.00.5 per million British Thermal Units, which Nathan Perry, Hamilton's Utility Business Manager, said will allow customers to receive what have been low rates for recent years, throughout that five-year period.
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Perry noted Hamilton’s rates have been adjusted upward three times since 2003, and said they for years have been among Ohio’s lowest.
Hamilton last raised its natural-gas base rates in 2007, and adopted a Residential Service Line Maintenance rider in 2011, which was designed to recover costs of maintaining and replacing residential service lines.
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