MARQUETTE - The Marquette City Commission voted Monday to approve rate hikes requested by the Board of Light and Power.
The increases, previously approved by the BLP board of directors, include an 8.5 percent rise in rates each year over the next three years. According to the BLP, 8.5 percent translates to $4 per month for an average residential customer who uses 500 kWh monthly.
According to the BLP, increases were delayed in 2011, 2012 and this year because of the economic downturn.
David Lynch, superintendent of Distribution for the Marquette Board of Light and Power, is holding up a smart meter, technology that will save consumers money and will help reduce a household’s energy use. The Marquette City Commission Monday OK’d rates hikes of 8.5 percent annually over the next three years as requested by the Board of Light and Power. (Journal file photo)
However, the BLP decided on the new rate track because it determined current revenues fall 17.8 percent below costs necessary to provide service.
Commissioner Don Ryan said he understood the concern over the rate hikes.
"But I think we have to make a business decision, not a political decision or a social decision," Ryan said.
He also said if there's any criticism of the BLP, it's that the rates should have increased last year.
The BLP had sought a rate increase for the next three years to invest in infrastructure and to meet future load growth.
"This is a huge business, and we want to continue to have this utility," Ryan said. "We have to give them support."
Commissioner Michael Coyne noted the BLP has had only one increase in the past 30 years. Also, he said if We Energies Presque Isle Power Plant closes, there's no backup.
Mayor Pro Tem Robert Niemi said: "It's our utility. It's our money and it will be used for our benefit."
Commissioner Sara Cambensy was the sole commissioner who voted against the hikes, saying she prefers a one-year increase instead of three years in a row.
"It's such a shock to have 25 percent in three years," Cambensy said.
She also pointed out the city couldn't raise similar taxes for other issues.
Commissioner Jason Schneider said he was torn on the issue, saying he understood BLP's position but believed other options could have been discussed.
"I really wish that we could have done one (year) and continued the dialogue we discussed," Schneider said.
Mayor John DePetro said providing power is shifting from coal to natural gas, and that's what the BLP is looking at.
"I believe this is going to be our part in helping the utility to stay solvent and get ready for the shift from coal to natural gas," DePetro said.
After the vote, Schneider explained why he voted yes, pointing out that unless customers pay the true cost for power, they don't make wise choices.
"I hope as our rates increase, we do think about the future," Schneider said.
The city charter gives the BLP authority to fix all rates for power it provides, subject to commission confirmation, with the rates becoming effective 30 days after confirmation.
Christie Bleck can be reached at 906-228-2500, ext. 250.