The Greenville Electric Utility System intends to raise electric rates, in part to help pay for the local utility’s share of the Gibbons Creek power plant through the Texas Municipal Power Agency (TMPA).
“The TMPA plant has been an integral part of GEUS’ power supply mix for many years keeping our rates very competitive”, said GEUS General Manager Gary Singleton.
It would be the first such increase in electric rates in four years.
The GEUS Board of Trustees has scheduled a public hearing for 6 p.m. Thursday in the GEUS Operations Center, 6000 Joe Ramsey Boulevard in Greenville.
According to an announcement from the utility, the proposed new rates would increase the average residential customer’s bill, one who uses approximately 1,000 kilowatt hours per month, by about $17.50 per month.
GEUS officials maintain that even with the increase, GEUS will still be competitive with electric bills in other Hunt County cities and the Metroplex.
If approved, it would be the first across-the-board change to the electric rate structure at GEUS since 2010. Other than occasional modification to the fuel adjustment pass through charge, which reflects changes in natural gas driven market prices, only a few revenue neutral rate adjustments have been made through the years to balance the cost share between residential, commercial and industrial.
GEUS officials said the proposal came after an extensive cost-of-service study was completed by NewGen Strategies.
The study concluded the system’s overall rates needed to be increased primarily to pay for GEUS’ share of the debt service for the Gibbons Creek Coal Plant during the final four years of the current TMPA contract. Greenville, along with Garland, Bryan and Denton, entered into very long-term contracts to cover the plant’s construction cost in 1975.
Greenville’s share of that debt was restructured on several occasions during the last four decades, ballooning some of the debt into the final six years of 2013 through 2018.
GEUS has managed to pay for the last two years of increased TMPA debt through cash reserves without the need to raise electric rates, but milder weather and moderate community load growth has depleted that reserve. The TMPA debt will be paid off in 2018, but the plant has a projected useful life of 15 to 20 years after that.
“Gibbons Creek Coal energy is significantly cheaper than natural gas generation and accounts for approximately 40 percent of Greenville’s energy needs,” Singleton said. “Having it completely paid off in four years could have the potential to place GEUS’ rates significantly below the market.”