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CPW proposed 5 percent rate hike has commissioners split

By Jim Fair, Editor
Published on Wednesday, December 7, 2011

There’s some tussling over the Greer Commission of Public Works 2012 budget that recommends a 5 percent increase in power and water rates to keep pace with prices it is paying for its utilities. Commissioners and CPW officials held its second workshop on Monday and adjourned with both sides agreeing to further study the financial report.

CPW General Manager Nick Stegall, after paring $1.2 million that included a 2.5 percent merit raise, told commissioners, “We’ve got about as low as we can go. We’ve had two years with no rate increase and the only other thing we can do is cut salaries and lay off people.” Stegall said expenses have been trimmed from $80 million to $74 million over the past three years.

“I’d say we’re in good shape,” Perry said. “We have a new shed, parking lot and we’re purchasing new trucks.” CPW also built a new substation (Hwy. 101) that is now online running electricity.

The rate increase would add $4.28 to customers’ monthly bills – $3.46 for electricity and 82 cents for water. Natural gas and sewer costs will not be affected.

Included in the proposed rate hike is a 2 percent, one-time bonus for CPW’s 130 employees. That cost is $166,000, or an average just over $1,200 per employee. CPW has 50 employees earning over $50,000 and 14 of those are paid $70,000 and above, according to the public database for state employees.

One suggestion from the commission was for CPW to use reserve funds for employee bonuses. “A rate increase does not justify a pay increase,” Williams said.

Commissioner Jeff Howell suggested he may favor a smaller, 4 percent, increase. “I do not like the rate increase. But it’s hard to continue to pass budgets showing losses,” Howell said. “We must maintain a healthy bottom line.”

A 4 percent increase would mirror's CPW's 2009 hike for power. Water bills have remained stable since 2007.

Williams contends more cuts in the 2012 budget can be made and he won’t vote for a rate increase. “I’m a big advocate of tightening our belt and holding our rate,” Williams said. “Until that time that we need an increase to (balance the budget) I’m an advocate of holding fast.”

Stegall told commissioners the longer that rate increases are declined the more the increase will be when it becomes critical to pass along the costs. 

Eugene Gibson, the longest serving commissioner, concurred that a double digit rate increase at a later date would amount to sticker shock for CPW customers.

“We see an overall positive bottom line,” Gibson said. “You look closer and three out of four utilities are operating in the red. Previously we let water and gas take care of sewer and electric. Now it’s regressed to all four utilities.”

Perry interjected, “Let’s not assume we’re losing money on water and electric.”
Stegall referenced CPW's rate to 19 comparable utilities. The October rate survey of South Carolina's Municipal Electric Systems has Greer ranked 18th lowest. CPW rates of $51.96 per 500 kilowatt hours and $92.27 per 1,000 kwh are considerably less than highest priced Clinton's $75.42 and $138.92, respectively.

"When I look at the other cities we’re compared to our rates are very, very competitive," Howell said.

CPW still has two months of financial data to report before the 2011 budget year is closed.
Any rate increase takes effect on Jan. 1. Commissioners will vote on the budget at its Dec. 19 board meeting at CPW.

Duke Energy has proposed raising South Carolina residential rates by 7 percent that still needs approval by the S.C. Public Service Commission. Duke originally proposed a 17 percent rate hike. Commercial and industrial customers would pay about a 12 percent increase.

Businesses mentioned in this article.

Greer CPW

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