April 24, 2014

Rock Hill leaders consider rate increases, extra $8 monthly for utility customers

Rock Hill residents could soon pay an average $8 more on utility bills if City Council members accept a proposal to increase electric rates and stormwater fees.

Rock Hill residents could soon pay an average $8 more on monthly utility bills if City Council members accept a proposal to increase electric rates and stormwater fees.

The proposed stormwater fee would add about 70 cents per month to the city’s residential customers’ utility bills. Customers currently pay $2.37 or $2.88, depending on their home’s lot size.

The rate increase will help pay for needed upgrades to Rock Hill’s storm drainage system, city officials said while presenting the proposal to council members Thursday. The money will be used exclusively to address stormwater drainage problems affecting many neighborhoods around Rock Hill.

Businesses also would see increased stormwater rates. Those commercial rate increases would range from 20 percent to 30 percent, depending on the size of the business and the amount of land used for commercial development.

City leaders propose using the money from the commercial rate increase to secure loans that would be necessary for nearly $6 million in other stormwater improvement projects.

City officials also considered giving some credits, or partial stormwater fee discounts, to businesses that manage their own rainwater runoff, which would reduce Rock Hill’s cost to manage stormwater. Schools may be eligible for the credits if their curriculum includes aspects of water conservation or water pollution education.

Rock Hill leaders say a 6 percent electric rate increase – or nearly $7 per month – for residential customers is needed to cover the increased cost of the city purchasing power from the Catawba Nuclear Station.

The city’s wholesale provider for electricity is the Piedmont Municipal Power Agency, or PMPA. The power agency owns part of the Catawba Nuclear Station on Lake Wylie.

PMPA will increase Rock Hill’s cost to buy power by 6.7 percent this year. City officials plan to “absorb” less than 1 percent of the wholesale rate increase within Rock Hill’s utility operating budget. The rest is expected to be passed on to residential and business customers.

The proposed 6 percent electric rate increase this year follows a 10-year trend of rising electricity costs for Rock Hill customers. As PMPA has raised its wholesale prices, city leaders say they’ve absorbed as much as they can into the operating budget.

Annually, Rock Hill spends nearly $15 million to cover rising electric costs from PMPA. Next year, city officials say they expect to see a 4 percent wholesale rate increase from PMPA which could result in customers paying nearly $5 more per month for electricity.

Over the next few years, the electric rate increases for customers will lessen, said Deputy City Manager Jimmy Bagley on Thursday.

City Manager David Vehaun agreed, saying, “We feel like the best days are ahead of us.”

After cutting spending to absorb all or some of PMPA’s wholesale increases over the past 21 years, there are no other ways to trim costs without negatively impacting service for customers, Bagley said.

While city electric rates have increased by more than 30 percent over the past 10 years, property taxes in Rock Hill have decreased by 8 percent. City Council members are expected to keep property tax rates and the cost of water, sanitation and sewer fees the same in this year’s budget.

Council members did not vote Thursday on budget suggestions. The city will hold a second budget discussion on May 8 before voting to finalize city spending plans in June.

The proposed budget – which will guide spending from July 2014 to June 2015 – is about $204 million, up from about $192 million last year.

The city is following a “slow growth” pattern, Vehaun said. As the economy rebounds, more money is coming in from many revenue sources, including fees charged to new businesses.

Most of the increased spending comes from Rock Hill’s higher cost to buy electricity. The council is considering hiring 18 new employees, which includes four police officers and a fire department battalion chief.

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