Increase proposed for City of Newberry Utilities

NEWBERRY — When balancing the utility fund budget, Utility Director Tim Baker said inflation hit the utility industry very hard over the last couple of years and while the department had been able to keep rate increases low for a long time, they were now needed due to the compounding effects of higher costs.

Proposed in the upcoming fiscal year’s budget, Baker said was an increase of $1 on base facility charges, and 5% on consumption for both water and sewer. An increase of $6 on base facility charges and 6% on consumption is proposed for electric.

The proposed average customer increases would be as follows:

• Electric (based on 988 kWh) – $13.23 increase.

• Water (based on 776 cubic feet) – $1.96 increase.

• Sewer (based on 776 cubic feet) – $2.42 increase.

The rise in base facility charges, if passed, would bring water to $14.56 and sewer to $27.09. When comparing the city’s rates with other providers in the area, Baker said the city will remain competitive.

The last electric rate increase the city passed was in 2014, Baker said.

Should the new rates pass, inside city residential customers would see a total average increase ranging from $12-17 per month, based on the wholesale power cost adjustment (WPCA). Baker said the WPCA exists to address small fluctuations in power costs.

While over time these fluctuations have gotten close to one cent per kilowatt hour, Baker said staff was working to get that reset as close to zero as possible.

The total estimated utility gross revenues for the upcoming fiscal year are $36,764,969, representing an increase compared to last year at $35,256,791. Baker said this change is the net result of the requested rate increases, but was offset by the reduction in consumption of one of the city’s largest commercial customer.

Utility Administration Division, totaling $811,500, is recommended to increase $157,895 relative to the prior year; primarily from shifting maintenance agreements for the city’s AMI and GIS systems from a capital account to an operations and maintenance account. Other significant increases under this line item, Baker said, were in advertising, a rate study to maintain bond compliance and salaries to maintain competitive wages.

The Electric Division line item, totaling $1,713,245, is recommended to increase $287,901 compared to last year; primary increases coming from payroll increases to remain competitive, shifting maintenance agreements for the city’s SCADA and Cityworks systems from a capital account to an operation and maintenance account, as well as meters and meter parts for replacement.

The line item of Water and Sewer Distribution is recommended to increase $52,028 compared to last year, with the primary change due to payroll increases and cement/masonry due to higher road patching costs.

Baker said as the city does repairs, cement and masonry were very expensive, but that the department was trying to keep costs low whenever possible.

Water Production, totaling $1,447,586, is recommended to increase $115,205 relative to prior year. Baker said the increases come from chemical costs and from shifting maintenance agreements for the city’s SCADA from a capital account to an operation and maintenance account.

Non-Departmental expenses, totaling $22,997,509, is recommended to increase $663,101 relative to the prior year, primarily from the city not expecting Piedmont Municipal Power Agency (PMPA) credits this year. Baker said funds were also budgeted within this line item to update the city’s website.

“Our website is the front door to the city for many people,” Baker said. “We want to make it easier to navigate for our customers.”

A new line truck (digger derrick) is proposed under the Electric System Capital line item. The department’s current truck has been in operation since 2005 and needs replacing, Baker said.

“These trucks have a three-year waiting period,” he said. “We’ve been on the list for two years now.”

The Water System Capital budget, totaling $418,000, is recommended to increase $68,000, Baker said due to the need to replace one of the city’s excavators, which is used almost daily. The one being replaced, he said, was approximately 8-9 years old.

“This division had a significant reduction last year, so this increase is still below average capital spending in this area,” Baker said.

Baker said the department received a Rural Infrastructure Authority (RIA) grant in 2021 to complete residual handling at the water treatment plant. This process, he said, will eliminate the need to recycle and build manganese in the city’s system.

“We do not expect to complete this project by the end of the year and will likely finish in July or August,” he said. “We are requesting to use the remainder of the funds that were not used in 2023 due to timing.”

The city was also notified recently, Baker said, that they were recipients of $10 million for the South Carolina Infrastructure Investment Program. The grant requires a 15% match of the city, being $1.4 million. Baker said he along with other members of city staff would be attending a meeting on May 31 that would provide them with some additional information.

Baker said they may have to come back to council for a budget adjustment for these funds.