City electrical rate increase to be funded through debt service bond

By Ann Wickett

The city of Tecumseh will be seeing an increase in electrical rates effective January 1, 2018. Going forward this will be an annual 4.85 percent rate increase over the current rate which has been in effect since May of 2013. Customers will not see this increase as it is being paid through a debt service bond. Adam Fritz and Ken Fairchild of Olsson Associates reviewed the results of a recent Electric Rate Study with the Board of Public Works on Monday afternoon.

In 2018, it is the city’s intention to approve an electric system improvement project that will be funded entirely with a debt service bond. Olsson Associates used a conservative estimated cost of $2,300,000 for the new debt service repayment schedules. This city rate increase will cover the cost of purchased power, $186,403 for new bond debt service on the electric line upgrade; 15-year repayment, $100,000 for capital additions/improvements and provide cash for the reserve fund of $260,100, plus $25,000 for a total of $285,100 per year.

The Board also approved the payment of $40,800 for amendment #1, to Electrical Engineering Service Agreement with Olsson Associates.

 

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