Logan Light & Power director Mark Montgomery talks to KVNU For the People host Jason Williams.
LOGAN — Logan mayor Holly Daines was not available, so it was Logan Light and Power director Mark Montgomery who appeared on KVNU’s monthly Speak to the Mayor program on Wednesday during For the People.
He said there are some future rate adjustments coming down the lines in the near future.
“What we do every 3 to 5 years, and I think because the market’s so crazy, we might start doing this annually, but we’re going to do a cost of service analysis. Basically what that does is it takes all of our revenues…and then it looks at all of our costs. And it’s just to determine if our revenues are covering our costs, and I can tell you last year they did not. I had to pull one and a half million dollars out of reserves to cover our power costs”, he explained.
Montgomery said he’s been with Logan City for 10 years and they have not had a rate increase, which is pretty impressive. But he said power costs for them to purchase power on the open market have skyrocketed like everything else.
He said back in 2008, power costs went from 20 to 50 dollars per megawatt hour to thousands of dollars very quickly and the city had no ability to pass that cost on, so they went through what’s reported to be 18 million dollars of their reserve money in about 3 months, which was pretty much the full amount.
“In order to keep that from happening again, way back when, Logan city passed this electrical surcharge. Basically what that means is, if in a month, Logan city’s budgeted amount for power doesn’t cover what the billed amount is, they will take those dollars and spread those over the kilowatt hours used the next month amongst all customers, all rate payers. So, we haven’t enacted that for several years, in fact, since I’ve been here we haven’t done it.”
But Montgomery said they are going to do it this year. The impacts for a smaller home will probably be an increase of a dollar – ten a month in their power bill, but he admitted the ones that will feel it more are the large industrial customers.
“The university, and the hospital and Gossners and Schreibers, they’re going to see that a little more. We’ve met with all of our large scale industrial customers and kind of let them know this was coming. They were actually pretty understanding because everybody is seeing pressure on costs for everything in every part of their budget.”
During the hour, Montgomery also shared a major reason for power outages in the city is squirrels, so they put what’s known as a squirrel guard across the lines to protect the energized parts of the transformer to keep that from happening.