Former Albany Utility Board member airs concerns over proposed rate hikes

ALBANY — One of the Albany Utility Board’s former members posed three questions for that body to consider Wednesday as the city ponders raising utility rates paid by its 35,000 customers.

The Utility Board voted 3-2 at its last meeting to recommend that the Albany City Commission approve across-the-board utility increases proposed by City Manager Sharon Subadan as part of the city’s ongoing budget process.

Businessman Chad Warbington asked the board to bring Municipal Electric Authority of Georgia trust credits, Purchase Power Adjustments and Purchase Gas Adjustments on bills, and transfers from the utility to the city’s general fund into the general discussion of the proposed rate increases, which have drawn outspoken opposition.

The former Utility Board member also criticized the language used by some city officials to justify the rate increases.

“To say that the utility is losing money is, I believe, a misrepresentation,” Warbington said. “It troubles me to hear terms like ‘defunct’ to describe the utility. We have a profitable, well-run utility.

“What I’ve not been able to wrap my mind around is the amount of transfer that the utility makes to the city’s general fund. That amount was, traditionally, 7 percent, but the $18 million transfer under the current budget amounts to 11 percent. In my opinion, this is, in essence, an 11 percent city tax on utility customers. I don’t know how that compares across the state, but that’s something I’d like to know.”

Warbington said after the meeting that he does not question the call for rate increases, but is more concerned about the justification for the increases.

“I just think it’s wrong to try and justify rate increases by saying things like the utilities are operating in the red,” he said. “When (city officials) say things like departments are ‘losing money,’ that’s just wrong. The problem is that at least part of the $18 million that is being transferred to the city could be used to replace old sewer lines, to bury cable underground, to replace outdated meters with smart meters.”

Warbington also said he’d like to know how MEAG credits, sent to its 46 members — including the Albany utility — after being collected as a hedge against deregulation, are being used.

“The budget that (former interim city manager) Tom Berry brought to the city and the first one brought by Ms. Subadan did not include use of approximately $18 million in MEAG trust credits,” Warbington said. “My question is, what are we doing with those credits? I’ve heard that they’ve been put into reserves, but I haven’t heard a plan for their use. I’d like to propose that these funds be used to make infrastructure improvements.”

Warbington also said Purchase Power Adjustments and Purchase Gas Adjustments, which account for market changes or drastic demands of utilities and are passed on to consumers as non-budgeted increases, should not be used as a way to “simply increase profits.”

“I don’t feel that PPAs and PGAs are being managed from a utility standpoint,” he said.

Also at Wednesday’s meeting, the board voted to recommend that the City Commission approve a $42,820 contract with Donald Smith Co. of Headland, Ala., for chemical and mechanical cleaning of Well No. 9. Asked the purpose for the request, staff said the well had initially pumped 1,669 gallons of water a minute and it now is pumping around 600 gallons.