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Peru Utilities approves lower rates

BY ANTHONY LOMBARDI - alombardi@perutribune.com

Peru Utilities customers may get some relief from high summer cooling bills. 

The average residential electric customer who uses 750 kilowatt hours (kWh) per month could see a decrease of about $9.61 on their third-quarter bills. 

The Peru Utilities board unanimously approved the third-quarter rates on Wednesday. If the Common Council gives the OK, the change would go into effect on July 1. 

“The good news is … July, August and September are the heavy electric usage season because of air conditioning,” said Peru Utilities General Manager Joe Pandy at the meeting. 

This quarter’s decrease comes after about a $5.44 increase on the second-quarter electric bills, which followed a decrease of about $4.75. 

Pandy said the flux in price illustrates the problem with the wide swings in the company’s tracker. “It’s moved almost $15 a (quarter),” he said. “The good news is for the customers who saw a $5 increase the last three months.” 

Pandy said “there’s too much in the tracker” and it’s one of the aspects of the electric rates he’d like to see fixed. Most trackers are designed so the average customer would see a change of less than $1 either way each month. 

Peru Utilities Assistant Office Manager Kevin Shives told the Peru Tribune in April that the way to blunt the impact of the tracker is to put more of the cost into the base rate. 

“You reduce the tracker but you raise the normal rates,” Shives said. “The bill that we send customers has the tracker, and then it has just the base rates that were developed quite a few years ago.” 

At the latest Common Council meeting on May 1, council members voted to amend an ordinance that required an independent firm to conduct a cost of service study prior to any change in rates. This now allows Peru Utilities to perform its own cost of service studies, including analysis of trackers, Pandy said. 

The ordinance states “Peru Utilities staff that has experience in preparing applicable utility rates and charges for water and electric utilities” can do the study instead. Utilities Project Manager Josh Chance said doing these studies in-house can help save the city between $30,000 and $50,000 per study. 

The Common Council can still elect to retain an independent firm to review the rates and charges if it deems appropriate.

By law, the ordinance will take effect 60 days after its adoption and publication.