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Residents of Williamstown might cool down after city council approved a 5 percent cap on the city’s utility surcharge.
Surcharges on residents’ utility bills, which started showing up in 2009, happened when consumers actually used less power than the city contracted to purchase and the surplus was sold back on the open market.
If the city paid $60 per megawatt hour, but the same hour sold for $40 on the open market, the cost difference falls back to the utility customer.
This means if a customer’s bill averaged $100, the highest the surcharge would be is $5, making that month’s bill $105.
“I wanted to make it predictable for our customers,” said Mayor Rick Skinner. “The city will still recoup the cost, but it will be at a slower pace.”
Under the previous utility contract between the city and Amp-Ohio, the utility surcharge ballooned to as much as 25 percent in May 2009. In December 2009, the city entered into a new contract and the highest surcharge since then was in January 2010 at 13 percent.
When signing the contract with AMP that began Jan. 1, 2010, the city only contracted for 96 percent of the electric they historically used. The reason the city chose to contract for only 96 percent of the usage from their current contract was to hopefully save residents some money. This gamble will pay off if the residents use the amount the city predicted they will.
“Basically, we’re betting in the new contract that it won’t go over 5 percent,” said Skinner.
The average surcharge for 2010 was 3.35 percent.
The cap was one of Skinner’s top priorities when he took over as mayor in Williamstown last month.
The city council approved his recommendation in a special meeting on Feb. 22 for six months.
“We’re in our third month and its canceled out, so we’re already in good shape,” Skinner added.
The utility surcharge was not exclusive to Williamstown.
“We charge our customers a base rate plus the power adjustment,” Skinner said. “Others hide it in their regular rates or call it an environmental surcharge, but it’s a power adjustment.”