Newberry to cut electric bills 

Electric meter on red brick wall

The average Newberry electric customer will see a $20 drop in their bills starting in June as the city lowers its power cost adjustment (PCA) charge. 

The PCA is added to electric bills to help pay for power purchases, Dallas Lee, the assistant city manager and chief financial officer, told the commission Monday night. The PCA fluctuates based on the price of fuel and has spiked as the cost of natural gas has risen. 

“We are charging $45 per customer per month for that power cost when about two years ago we were charging $5 a month,” Lee said. “It’s a pretty dramatic increase to our customers.” 

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Lee said wholesale power costs account for 70% of Newberry’s electrical expenses and the bulk of customers’ bills. 

Customers who use an average of 1,000 kilowatt hours of power a month will see a decrease from $157.50 to $137.50 starting in June.  

The average residential bill will decrease from $157.50 to $137.50. Mid to large commercial customers will also see a decrease. 

“We are committed to providing reliable and affordable services to our customers,” City Manager Mike New said in a press release Tuesday. “The lower natural gas prices have enabled us to pass on significant savings to our customers through the reduced PCA.” 

Lee said the cost of natural gas is expected to stay stable over the next year or two unless “another world power invades a country and all the oil rigs shut down.” 

Courtesy city of Newberry Newberry electric rate cost projections chart

The price of natural gas is 53% less than Newberry budgeted for, Lee said. Continued stable prices allow the city to drop the PCA and also will give the city a chance to replenish its rate stabilization fund. 

The city keeps about money equivalent to 2 to 2.5 months worth of bulk power costs in the rate stabilization fund – approximately $500,000 to $650,000. The fund helps the utility keep the power costs from fluctuating between the hotter and cooler seasons and acts as a reserve in case of an emergency. 

The natural gas price spike had drained the fund, and the city has used general funds to stabilize rates, Lee said. 

Assuming the fuel prices stay stable, it will take the city approximately a year to get its rate stabilization fund back to normal, Lee said.  

If the city would keep the PCA at $45, it could refill the stabilization fund much faster but Lee said Newberry wanted to help its customers. 

“We’re just going to chip away at it a little bit, while still keeping in mind that we want to make sure our customers are feeling the benefit of the lower costs,” Lee said. 

Mayor Jordan Marlowe praised the city’s employees’ management of the PCA and the rate stabilization fund. 

“I know that everybody’s utility bill is hard right now,” Marlowe said. “We still get those calls and complaints. … It’s higher than it has been but it’s not as high as it would be if we didn’t have such professionals at the helm looking ahead.” 

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