Electric utility shouldering portion of rate increase

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City's power supplier passing on higher costs

By Vince Luecke

TELL CITY — The Tell City Electric Department will absorb a portion of increased power costs passed on to it by its wholesale supplier, the utility's superintendent told the city council last Monday. The help will only last for three months, but the gesture will phase-in a 13.6-percent increase adopted by the Indiana Municipal Power Agency.

IMPA provides electricity to Tell City and more than 50 other communities and is being forced to pass on its own higher costs to customers.

The Tell City Electric Department's board of directors agreed last month to pass on 9 percent of IMPA's increase for the first three months of the year, with the remaining 4.6-percent hike effective in April.

Tell City customers will see the increase in their February bills. The full 13.6-percent increase will take effect April 1.

"We know it's a difficult economic period for a lot of people so we want to do what we can to help," Electric Department Superintendent Marlow Smethurst said. "We exist to serve our customers."

Representatives of IMPA hosted a public gathering late last year to share information on the costs it faces, including costs of coal and compliance with environmental regulations.

IMPA President Raj Rao attended the meeting and said IMPA has operated under conservative financial principles and has not overextended itself and continues to widen the sources of power it generates on its own and purchases. IMPA currently receives some of its power from a  wind-generation facility and purchases other power from a nuclear facility. It also has equity in two power-generation facilities under construction in Kentucky and Illinois.

The new rate increase, passed on automatically as a tracker on bills, follows a summer 2008 rate increase that raised residential customers' monthly bills by an average of 7.1 percent.

That increase, which took effect with June statements, was half of what the utility's board of directors originally asked for.

The extra revenue is being used to fund various projects and purchases, including a new truck for linemen and equipment upgrades at the Eckley Substation.