Commission wants joint session with BLP

MARQUETTE – The Marquette City Commission on Monday said it wants a work session with the Marquette Board of Light and Power to discuss the process of future rate increases.

The decision follows complaints in the community that the commission moved too quickly when approving recent rate hikes.

The commission directed the city manager to schedule a meeting between the two groups. The session is expected to be set within 60 days.

Commissioner Tom Baldini alluded to what he would like to be discussed during the work session, which included establishing a period of 60 or 90 days to review a rate increase proposal before the commission can vote on it.

Under the city charter, the BLP has authority to set its own rates, but they are subject to commission confirmation. While new rates cannot go into effect until at least 30 days after commission approval, there are no time restrictions for when the commission can make a decision.

“The charter provides that we have a say in rate increases, and if you look at our own charter, … we have to have a second reading on ordinances, which means we can’t introduce it one night and vote on it the same night,” Baldini said. “When we lease property over a certain amount, we cannot … introduce it and vote on it one night.”

Because the BLP is a municipal-owned utility, it isn’t subject to oversight by the Michigan Public Service Commission like private companies are. Companies seeking rate increases through the MPSC are required to go through a 180-day review period before a decision is made, Baldini said.

Baldini hoped a similar waiting period would allow commissioners and city staff time to fully evaluate how the proposed rate increases would affect the city budget and other items, while also providing the public with time to learn about how they might be impacted.

Baldini’s proposal comes after concerns he’s heard in the community that the BLP and commission acted too quickly when approving a 30 percent rate increase for BLP customers.

On Oct. 26 the commission voted 4-3 to approve the increase that will essentially fund construction of a new natural gas-fueled generating facility along Wright Street. The commission and BLP held its first scheduled work session to discuss the project on Oct. 5.

BLP officials said part of the reason behind moving quickly was because of a locked-in purchase price with the company selling the generating units that was set to expire in early November and based on a low Euro-to-dollar exchange rate. Had the price agreement expired, BLP officials said it could have cost more to purchase the generators.

Commissioner Mike Plourde supported the idea of a work session with the BLP, but felt the review period is more of a policy for the commission than it is for the utility.

“It’s the commission that voted quickly on this particular issue,” Plourde said. “To be honest that was the only complaint I heard about the whole issue, was that it happened very rapidly. … I think this proposal suggests that in the future as we do business, we just set some guidelines as a commission and this is how we’re going to do it in the future.”

While most commissioners said they didn’t want to revisit the recent rate increase decision, they generally agreed with the review period but wanted the BLP to be involved with discussions before taking any action.

“When they come up with these rate increases, it’s not like ‘boom’ they got it. These people have been working on it for years,” Mayor Dave Campana said. “They have public hearings, nobody goes to them. That’s how it is. … I don’t know if it’s going to help at all by extending this way out. It’s always good to have more information before we vote on something, but how much time do you need?”

Ryan Jarvi can be reached at 906-228-2500, ext. 242.