In a summertime tradition as entrenched as fireworks, watermelon and melting ice cream, power bills have escalated in Alexander City but officials said it’s not because of anything the city has done.
The municipal government, which supplies electricity to about 4,000 residential customers through the Alabama Municipal Electric Authority, has not increased its residential electric rates since 2007, according to city clerk Amanda Thomas. The city hired Stewart Engineering to set the rate structure in 2006 and any increase would have to be approved by the city council.
The city has gotten numerous complaints in recent days about a spike in electric bills but that’s common this time of year.
“It’s usually when the weather changes from mild to hot or mild to cold that we get most of the complaints,” said revenue officer Jason Locke, who often serves customers who come to city hall to pay their bill. “We catch the brunt of it but most people are nice to us.”
Thomas said the last rate change in Alexander City was Oct. 1, 2007, when the city council approved charges of $8 minimum per residential customer, 0.0810 per kilowatt hour from May to September and 0.0760 per kilowatt hour from October to April. The more kilowatt hours used, the more expensive the bill.
“Residential customers, unlike commercial and industrial customers, are charged based strictly on energy consumption,” AMEA president and CEO Fred Clark said.
Alexander City Mayor Tommy Spraggins said he has also seen his utility bill increase substantially.
“It’s obvious power usage goes up in the summer,” Spraggins said. “We’re looking at this and taking it seriously. If there is a problem, we’ll certainly address it. We’re fortunate we manage our own utilities and can provide lower cost to our citizens as compared to bigger utility companies.”
Spraggins said his utility bill increased from $237 in April to $310 in July but that includes water, sewer and garbage pickup.
Not only has Alexander City not increased its rates in nearly 12 years, the AMEA has not had a rate change since 2012 and doesn’t expect one until 2025, Clark said.
“We’ve had historic heat in May and June,” Clark said. “There is demand as it relates to air conditioning. On many homes, we’re cooling the outside of the home due to a lack of insulation.”
Clark said the AMEA is developing a way customers can track their electric costs every day through a website.
“We are working with Alexander City and other members to put in advanced metering,” he said. “Hopefully in two years you’ll be able to look on your iPhone and see how much you’re spending. A day like today, you might be spending $20 a day on electricity. We’re working with our members to improve our metering so customers can see what they’re using and spending.”
While the base electric rates have been stable for more than a decade, the fuel adjustment rate fluctuates, although it has been relatively calm as well.
“Many factors determine the bill each month,” city finance director Sandy Stanbrough said. “One of the factors is the fuel adjustment rate. AMEA has a mix of generation (sources) to mitigate cost changes — coal, hydro-electric, solar and nuclear. They reserve the most expensive for peak times; they try to keep that off line until they need it. … When it’s 95 degrees with humidity of 90% and the heat index is 105, air conditioners are running a lot.”
Alexander City’s fuel adjustment factor in 2018 ranged from .005 to .030 per kilowatt hour and in 2019 has ranged from .005 to .021, Stanbrough said. The average from January to July 2018 compared to the same seven months this year is virtually the same — .014 in 2018 and 0.13 this year. The highest so far this year is July at 0.21.
“The fuel cost within the rate in Alexander City is a levelized rate year ’round and that has not changed in probably five years,” Clark said.
Monthly Alexander City utility bills list a usage history, including kilowatt hours consumed, and Clark said the way billing is arranged dramatically affects the bottom line when customers see what they owe.
“Bills run 30 to 45 days in arrears, so you’re going from a milder period versus a hotter period in one bill,” Clark said.