The economics of utilities and public health crises are colliding, forcing the village of Montpelier’s non-profit electrical utility company to increase rates to make up for the losses.
As the Bryan Times explains, the village buys its electricity from the larger American Municipal Power cooperative, purchasing an estimated amount of electricity at a set cost at the beginning of the year, then using the local revenue to pay A.M.P.
Due to the pandemic, Montpelier’s revenue dropped by 40% in both April and May compared to revenue in those two months last year, so the village is attempting to sell off that unused energy — but many other utilities across the country are in the same boat, meaning it’s a buyer’s market, and small municipal utilities like Montpelier are taking heavy losses just to make something back.
Those losses are being passed on to the consumer through a built-in variable adjustment on bills; something that doesn’t require approval from the village council. Some residents may have already seen a slight increase on their last bill. Two additional increases are expected in the next two billing periods, with the largest occurring in August. A.M.P. is currently formulating a plan to stretch the added costs out over the remainder of the year so that consumer impact can be minimized.
Village Administrator Jason Rockey says Montpelier appears to be the hardest-hit among A.M.P. members, and Williams County in general saw atypical losses, which he attributed to the area’s heavy dependence on factories that manufacture automotive parts.
Meanwhile, energy usage is increasing, but not by much. Rockey says peaks are reaching 10 megawatts this month so far, but the usual for June is 14 megawatts.