A consulting company provided its study of Trenton Municipal Utility electric rates. Toth and Associates of Springfield developed statistical projections that cover the next five years. The information was reviewed yesterday afternoon by the Trenton City Council’s Utility Committee and city officials.
Three scenarios were presented. One involves the effect on the TMU electric department if there’s no increase in rates. Another shows the effects of an average increase of 10.6% if taken in one year. The third option projected the effects of a 10.6% increase when spread over five years.
Elements of the rate study included the revenues required, allocation of cost, and the rate design. Revenues are needed for the operating budget, and capital projects, and to maintain the City Council-requested cash reserves. Kilowatt-hour consumption was evaluated for the fiscal year that ended in April. This involved over 35,000 (35,742) residential, commercial, and large industrial customers. Purchased power costs were evaluated. Operating expenses during the next five years were projected using a 1% to 2% inflation rate.
Each of the three scenarios listed the cash flow summary from the current year (2023-24) through the 2027-28 fiscal year. Those calculations included beginning cash amounts and revenue received from customers. They subtracted anticipated expenses, principal payments, and the minimum cash reserves. Income statements predicted operating margins and cash flow if no increase in rates, the 10.6% increase in one year, and the same increase spread over five years.
Toth and Associates presented a summary of present and proposed TMU electric rates. The existing residential base fee is $18 a month. That would rise to $19 if a one-year rate increase is approved. The five-year plan offers a 20-cent increase each year. The commercial electric base fee is $24.50 per month. That would rise to $29 a month whether the increase is enacted in one year or spread out over five years. The commercial power base fee is $55.50 per month. That would climb to $85 a month whether the increase occurs in one year or in five years.
Reminder: these are listed as base rates. The actual cost depends on the customer’s usage in terms of kilowatt-hours. As an example, a residential customer in Trenton using an average of 980 kilowatt-hours per month could see the bill increase from approximately $118 to $128 monthly if there’s any approved increase in electric rates.
Comptroller Rosetta Marsh provided the Utility Committee with net revenue and cash analysis reports on all three TMU departments. As of August 31, it shows electric with a net gain of more than $17,000 but a fiscal year-to-date loss of $18,000. The net gain in water is nearly $93,000, while the fiscal year-to-date gain is nearly $250,000. The net gain in wastewater or sewer is over $135,000, with a fiscal year-to-date net gain of $531,000.
Information provided in this news story was obtained from documents that Trenton City Hall provided the media Tuesday morning. It does not reflect comments that were made during the Tuesday afternoon meeting of the Trenton Utility Committee.