By CLARICE DOYLE

Executive Editor

Summer temperatures are beginning to bump the triple-digit mark and so are many utility bills.

News that rates are going to increase again on July 1 is not welcome for many City Electric users.

Grand River Dam Authority has notified power purchasers, such as Claremore City Electric, of a second “power cost adjustment” increase to go into effect July 1.

City Electric customers will most likely see that increase reflected in their “fuel adjustment” charge starting with the June 30th billing cycle.

Tim Miller, utility supervisor, said the city has no choice but to pass the increase in charges along.

“There are no profit intentions from the city, we are just trying to recoup cost,” Miller said.

GRDA’s letter advised the City that the PCA would go up from $0.00288 per kWh to $0.00966 per kWh which translates into an average increase of $8.25 per bill for residential customers, $17.40 for commercial customers and $565 for industrial customers.

These costs will be in effect for the next six months, through December. GRDA reviews power cost twice a year, June and December.

GRDA Chief Executive Officer, Kevin Easley, in making the announcement said, “The historic drought impacted GRDA’s generation mix significantly. Beginning in October 2005 and continuing through most of April 2006, hydro generation virtually ceased.”

Hydro generation accounts for more than 10 percent of GRDA’s total annual energy requirements. Up to 85 percent of GRDA’s energy is generated by GRDA’s coal resources.

Another factor, was the drainage and inspection project on the Salina Pumped Storage facility (also impacted by low lake levels) and an increase in the cost of delivered coal to the Coal-fired Complex.

“Adequate water levels were not available for pumping until May, and generation from the pumped-storage facility is not expected to return until later this month,” Easley said.

The decrease in generating capacity at GRDA, made it necessary to purchase power on the open market to meet their customer demand. GRDA power purchases increased from $15 million annually during the period of 1996 through 2005 to over $55 million in the last 12 months ending in May 2006.

Already $10 million of energy was purchased in April and another $15 million in undercollected fuel and purchased power costs is expected to have accumulated by the end of this month.

Even with the increase in rain and more normal run-of-the-river hydro generation levels, GRDA expects additional “open market” energy purchases when one unit at the Coal-Fired Complex undergoes a planned, major maintenance outage for 12 weeks this fall.

The current contract between the City of Claremore and is currently voided due to the “level of rate increases,” said Miller.

Matt Mueller, City operations director, said the City is working with others in their GRDA customer group in an effort to “stabilize rates, lower costs and reduce the burden on the consumer.”

“We are always willing to look at what is in the best interest of our consumers,” Mueller said.

Miller said GRDA has traditionally been “by state law” an at cost provider and when it comes to buying power there are a “myriad of facets to look at.”

Other power suppliers may be offering lower rates, but “there is more to it than just what they are selling it for such as how we are going to get it here and how much it is going to cost to get it here,” Miller said.

Mueller said a lot of Claremore’s limitations have to do with transmission lines.

Electricity sales are a major portion of the City’s operation budget, paying for salaries, goods and services. Sales tax revenues are earmarked for specific areas such as police, fire, utilities parks, and now the waste water treatment plant.

Contact Clarice Doyle, cdoyle@cnhi.com

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