Surcharge added to electricity bills soon

Published 9:20 am Thursday, May 14, 2015

Customers of Niles’ electric utility will see their bill go up beginning as early as next month.

On Monday, the Niles City Council unanimously approved placing a surcharge on electric sales in order to help pay for the cost of removing the Pucker Street Dam.

The surcharge is one cent per kilowatt-hour for the first six months beginning in either June or July, according to Utilities Manager Jeff Dunlap.

The city’s average electric customer uses about 1,000 kilowatt-hours a month, Dunlap said, meaning the surcharge will cost that person about $10 a month.

The surcharge decreases to half a cent during the second six months and to a quarter of a cent after that.

Dunlap said the quarter-of-a-cent surcharge would remain in effect until all of the city’s local expenses for the dam are paid for — an estimated three to five years.

How did it get to this point?

Originally, the city estimated removing the deteriorating dam would cost around $1.8 million. However, that estimate skyrocketed to around $3.5 million after tests revealed several complications with the project.

Dunlap said in December that the amount of sediment built up behind the dam over the last 130 years is beyond what was originally anticipated, meaning it will cost more to remove and manage the sediment.

Another problem, he said, is that the Pucker Street Bridge, located upstream of the dam, would become structurally unstable if the dam is removed. Early planning and design concepts indicated that there would be no impact to the bridge.

In light of these issues, the council determined that placing a surcharge on electric sales was the best way to pay for the added expense.

To date, the city has been awarded grants totaling just under $1 million for the dam’s removal, and the city anticipates it will receive another $1 million more in the future.

The city has owned the dam since 1894. It produced hydroelectricity for more than 60 years until 1993 due to ongoing maintenance issues that became too expense to fix.

The city council decided to remove the dam in 2013 after concluding it was too costly for it to be restored.

Dunlap said even if the dam were restored, it would cost more for the city to produce power with the dam than it would to purchase power from AEP.

The city estimates that the dam saved electric ratepayers around $3.9 million during 62 years of power production.