Lansdale Residents, Businesses Paying Back $237,000 Electric Bill
Thursday, March 20, 2014 • 2:34am
LANSDALE, Pa. - About 8,500 Lansdale Borough electric users will be paying back $237,000 in extra charges racked up during the subzero temperatures in January, which equates to 1.8 cents per kilowatt hour in additional consumption.
Lansdale Council Wednesday voted, 8-1, in favor of a one-time charge to all borough electric customers to defray the cost of the additional transmission fees charged by AMP-Ohio. AMP-Ohio is the supplier of electric to Lansdale Borough, as part of a consortium.
Borough Manager Timi Kirchner said those who, for instance, used 1,000 kilowatt hours per the January bill would pay an additional $18.
President Jack Hansen cast the dissenting vote; he did not want residents and businesses to foot the bill, but to pay the $237,000 from the borough's capital reserve fund instead.
"I cannot support passing this on to residents and business owners in town. $237,000 is a lot of money to anybody," he said. "We're operating a $32 million budget and I cannot sit, with good conscience, and pass it on to the people. Some residents will choose between food or medications and paying the bill."
Hansen felt it would be taxing to apartment building owners using multiple electric meters.
"If they are paying the electricity, it's a tough nut for them," he said.
Councilwoman Mary Fuller understood Hansen's sentiment, but said she too will have to foot the bill. She said she could live with a one-time $18 charge.
"If you can't support it," she said to Hansen, "how do you propose it gets paid? It has to come from somewhere."
Hansen said the reserves are doing "very well."
"I don't want them to fall back to where they were," he said. "That's where it should come from. We should let the businesses and residents know in the borough we are working hard for them."
Fuller said it was all apples and oranges.
"I think the residents are understanding enough and smart enough to understand that we needed extra electric and power. We all used the power and we have to pay for that power," she said. "It's not an unreasonable request. It's a far bigger disservice to taxpayers to draw from the reserves, when we all can pitch in for the deficit this one time."
Vice President Steve Malagari asked Hansen what would then be delayed by a potential reserves payment.
"Pay it out of the reserves, at the expense of what? We talked about our roads are in shambles. So, the money back to the reserves could go toward those roads," Malagari said.
Hansen said it could, but everyone is just going to have to tighten their belts, including Lansdale.
"(We) have to tighten our belts to pay for other things this tough winter," he said, prior to the 8-1 vote. "It cost everyone a lot of money. In order to beat budgets, we need to tighten our belts."
Fuller said the borough can tighten where it can, but it cannot rely on reserves in such a situation.
Councilman Leon Angelichio shared Fuller's view.
"When there were storms down South and the refinery was disrupted, we pay more for gas and utilities. I understand additional costs," he said. "Is it an additional cost for the borough to take on? Because the borough didn't consume all the electric. As a consumable, costs go up."
Angelichio, who chairs the Administration and Finance Committee, made sure that it was a one-time activation situation.
"After the charge, does this go back into dormancy or is it always activated?" he asked solicitor Mark Hosterman.
"It's not currently in the rate structure for electricity," Hosterman said. "It is enacted anytime you have this surcharge to the borough.
Utilities Director Jake Ziegler said the resolution was created and activated during the odd-even gas rationing and oil embargo in the 1970s. In his 35 years with Lansdale, it had not been used since.
Kirchner said the February electric bill is OK, but warned next month's bill could be high.
"There is still another bill coming in April for March. March hasn't been the best of months," she said. "We would have to come back if indeed that happens again."
She said that notification to residents on the extra charges will be everywhere: electric bills, website, Facebook, Twitter and borough customer service.
"We are working to make it very simple terms so everyone can understand this electricity was used in an extraordinary moment in our history," she said.