In 2002, the Town of Smithfield had to increase electric rates to balance the budget. In 2005, rates jumped 8.57 percent.
Fast forward to 2017. The Smithfield Town Council voted unanimously Tuesday night to reduce rates on average of 4.5 percent starting in August.
Earlier this year, the Town of Smithfield received a 4.5 percent reduction in wholesale electric charges from ElectriCities. The Town commissioned a study of the rates with Utility Financial Solutions, LLC of Holland, Michigan to determine what percentage, if any, of the reduction should be passed along to residential and commercial customers.
After reviewing the study, the council voted unanimously to pass along the full rate reduction to customers. The average decrease will be 4.51%, with some customers seeing a 3.5 to as much as a 5.5 percent drop in their rates.
“Our goals is to get prices as close to cost of service as possible,” Councilman Travis Scott said.
Scott said the Electric Department funds remain healthy and asked the staff to begin researching how to stabilize rates in the future.
ElectriCities has already notified communities that they serve wholesale rates are planned to increase by 3 percent in 2020 and an additional 3 percent in 2021.
“Being able to reduce our rates is something our council has been working on and it’s another tool to promote economic development in the Town of Smithfield,” Mayor Andy Moore stated.
Customers could see a slight increase in their monthly base charge but overall will still enjoy the full discount. For example, a residential customer will see their base rate increase from $10.00 to $11.00 per month in August, but their overcall energy bill will drop on average of 5.50 percent. Some commercial customers will see base rates increase from $16 to $17 each month but their overall bill will drop by 3.50% percent on average.
The lower rates will take effect with the August billing cycle. The reduction will save about $759,075 in power costs to Town of Smithfield customers during the first year.