Officials sit down to talk utility costs
Published 9:49 am Wednesday, April 3, 2013
Editors Note: This is the first in a two part series.
BY ANDREW FAISON
FRANKLIN—The Tidewater News sat down recently with City of Franklin’s Mayor Raystine Johnson-Ashburn, City Manager Randy Martin and members of Franklin Power & Light, including Director Mark Bly, in a continuing endeavor to give citizens some answers into reasons behind escalating utility costs.
The Tidewater News staff included Associate Publisher Tony Clark, Managing Editor Lucy Wallace and Contributing Writer Andrew Faison. Questions were posed to the City representatives, a demonstration of meter reading was given and rates were discussed.
How are meters read in the City of Franklin?
The process of reading the three different kinds of electric meters for Franklin’s 4,700 residential customers has become a completely digital process thanks to the device known as the Electronic Radio Transmitter.
“This device is dumb. All it does is transmit data,” said Franklin Power & Light Director Mark Bly. “It does no calculations and can not be adjusted.”
ERTs are a radio device that permits meters to be read from a distance, allowing meter readings to be collected electronically with a mobile data collector, a laptop computer, or with a handheld receiver. Field technicians are able to download the readings for multiple meters at one time rather than walking from house to house to look at each individual meter.
Each meter has a serial number and each ERT has a serial number.
“Compare it to a cell phone number,” said Franklin Meter Reader Supervisor Billy Tomlin. “If I were to dial a cell phone I wouldn’t get in contact with the phone I want unless I dial the number correctly. If the meter does not read, for whatever reason, it will let me know and then I will go back out and do a reread.”
Once the reading is collected, the data is transferred to the billing department at City Hall where the billing is calculated.
“There are only three people that have access to the billing system,” said Franklin City Manager Randy Martin. “No one can change that information to make it so someone has a higher or lower bill than what they are supposed to have.”
Bly noted that each meter is constantly transmitting data, while currently the meter readings are only collected once a month.
“One of the things we are aspiring to do is upgrade our system to where we have the capability to monitor all of the meters on the system all the time,” Martin said.
With that new system Martin explains that a customer could then see not only their daily usage but also their highest usage periods during the course of a day.
How does Franklin’s electrical rates compare in Virginia?
City of Franklin residents pay $2.15 more per1000 kilowatt-hours than customers who pay Dominion Virginia Power directly, while paying $9.38 less than those on Community Electric Cooperative.
Where Franklin differs from Dominion is it offers summer and winter weighted rates; when a Franklin customer uses more than 800-kilowatt hours during October through May the rate is $0.07563, as compared to $0.10612 for June through September.
The highest electrical bill in Virginia belongs to customers of the Craig-Botetout electrical cooperative who pay $141.87 per 1000-kilowatt hours. Craig-Botetout serves the counties of Alleghany, Botetourt, Craig, Giles, Montgomery, Roanoke and Monroe, West Virginia. The lowest bill, $93.28 per 1000-kilowatt hours, belongs to Front Royal Municipal Electric Light Department, which serves the town of Front Royal.
Franklin purchases power on a wholesale basis from Dominion Virginia Power as a member of the Virginia Municipal Electric Association, which includes Manassas, Culpeper, Harrisonburg, Elkton, Wakefield and Blackstone.
Why doesn’t Franklin do away with its Power & Light Department?
One reason not to get rid of the department is the service element that Franklin’s Power & Light Department offers, said Franklin City Manager Randy Martin.
“Our power stays on more frequently with less outages,” he said. “When problems occur we don’t have to wait for equipment to take care of the main lines before coming out here. Our guys and gals are out there working everyday immediately to service our 5,400 customers.”
Franklin Power & Light is a non-profit organization said Director Mark Bly.
“We are not here to make a profit but we do have operating expenses,” he said. “We do have to maintain the electrical system and pay our employees.”
Martin notes the city is investigating all outcomes of selling the system to a bigger company as some citizens have asked.
“If it benefits the customers we would definitely look into that prospect,” Martin said.
The bigger reason for not selling the system, Martin notes, is the $1.4 million dollar transfer Franklin receives from Power & Light, for the maintenance of the electrical system and to pay employees.
“If we were to get rid of the department there would no longer be a transfer and city property taxes would have to go up $0.24 cents to generate the equivalent revenue for the transfer,” Martin said.
The $0.24 cent increase is based on the current transfer, noted Mayor Raystine Johnson-Ashburn.
“Franklin has had its own public utility since 1892, and the transfer has been in place since the beginning, although its level has changed over the years,” Johnson-Ashburn said.
“Moving forward we can investigate and look into raising the tax rate some so that we can lower the electric rate but that would have to be done during budget season,” Martin said.
How is Franklin helping citizens with their utility problems?
Since the March 25 investigation update into utilities billing audit during City Council, Martin has continued to receive requests from citizens to discover the culprits behind their escalating utility bills.
“I had one customer approach me after the meeting saying he thought I was talking about his case during my report,” he said. “The customer is a renter and noted he could see under his outer door just like it was an inside door. He has gone in his attic and sees the insulation is old, dark and thin. He wants help. He runs electric baseboard heat at the highest setting and the apartment is still cold.”
The city will be performing an energy audit for that citizen. Also Community Development will go in to perform housing inspections to make sure a building is up to minimum housing code in accordance with ordinances for tenant occupied properties.
“We are looking at weatherization programs so that we can draw resources to help partner with the landlord to improve the residence or enforce code if necessary,” Martin said. “We are not trying to intrude – we are just trying to help citizens reduce their energy bills.”
Franklin Power & Light is continuing to fulfill requests for meter rereads.
“After a few rereads on one particular customer’s meter, they requested a new meter be put in saying there was no way that they were using that much electricity,” said Power & Light Director Mark Bly.
A reading was taken on Sunday at 6 p.m. then redone at 4 p.m. on Monday before the meter was replaced.
“In that time frame they used 165 kilowatts,” said Meter Reader Supervisor Billy Tomlin, who has over 35 years of experience.
The average monthly kilowatt usage of a residence in the City of Franklin is 1,300.
After replacing the meter, per the customer’s request, Tomlin checked the new meters reading at 5 p.m. Tuesday.
“That same customer used 218 kWh in a day’s time with a totally brand new meter,” Tomlin said.
Bly notes that a meter will never speed up.
“They will however slow down, and when that happens a customer will actually pay less than what they are supposed to be paying,” he said.
Martin notes in addition to the 1,645 customers who received $344,170.88, in financial assistance from services including Social Services, Salvation Army, Cooperative Ministries and local churches, the city also offers a budget plan for electric bills to home owners, though currently it is a manual process.
The city is currently in the process of upgrading its computer software so that the process would be automatic.
“With the new system we want to also offer the service to renters as well,” Martin said.
Martin feels the budget payment plan benefits the customer.
“If a customer were to pay through the budget plan they would not see these sharp spikes in the higher usage months,” he said.
An adjustment may be necessary twice a year, if the usage is higher or lower than the bill was set up to cover.
Part two of this series will appear in Sunday’s edition of The Tidewater News. The story focuses on the citizens’ complaints and whether or not alternatives for lowering bills were considered before asking city council for assistance.
Impact of rate increases on Franklin
In July 2011 Dominion Virginia Power sought to recover a $433 million shortfall on fuel costs from 2010 with a fuel rate increase. The first part of the increase added $4.86 for customers using 1,000 kilowatt hours of electricity per month.
To cover the second part of Dominion’s increase, in July 2012, their customers began to pay an additional $3.31 per month more for fuel costs. The total increase for Dominion customers was $8.17 per month
The fuel rate covers Dominion’s expense to buy the coal, natural gas and uranium that power plants use to generate electricity. The company passes those costs through directly to customers with no markup for profit.
“When we get these bulk increases in power costs from our supplier we have to pass the costs to the customers to keep the rest of the systems operational,” said Franklin City Manager Randy Martin.
The City of Franklin had to increase electric rates by one percent in June 2012.
“Every 20 years we were required by Dominion to renegotiate our contract with them,” said Franklin Power & Light Director Mark Bly. “At that point wholesale power costs went up over 20 percent.”
The City used the electric fund cash reserves to offset costs to Franklin customers. “We did it long enough that our cash reserves dropped below our policy levels,” Martin said. “That is why we had a rate increase during last year’s budget process to build those funds back up.”
“We are slowly building those funds back up,” he continued. “It will still take 3-4 years to build up what we lost in a year just to get back to our minimum which is 10 percent of our operating budget – all to meet demands if there is some emergency.”
An emergency like the destruction left in the wake of a hurricane would require expenditure of funds to get services back in operation. Also some of the electric fund is used for capital improvements.
“It is always good policy to have a reserve fund,” Martin concluded. “You need to set aside a certain amount of funds to keep the system operating.”