At the City Council meeting on Sept. 25, one of the items for consideration is a 2.5% reduction in electric rates — following a 4.5% drop in the wholesale rate charged to the City by TVA.

Overall, TVA raised rates 17.45% last year. At the Council meeting where local rates were raised, I remember there being explicit clarification that the increase was a direct pass-through of the wholesale increase. Why then, not a direct pass-through of the wholesale decrease? The explanation provided by Janice McGinnis in yesterday’s Oak Ridger was this:

Oak Ridge’s proposed rate reductions are smaller than the approved TVA reductions because wholesale power costs do not account for all retail power costs, McGinnis said.

Also, Oak Ridge officials want to keep about 1 percent of the rate reduction to cover their costs, she said.

I’d be reallly interested in a more detailed explanation of the city’s costs, and what they plan to do with the extra 1% they’ll use “to cover their costs.” Shouldn’t that be 2%, since that’s the difference between TVA’s lower rate and the proposed decrease for Oak Ridgers?

She also alluded to a difference in the actual rate reduction for residential and commercial users, which makes me wonder how the school system is classified (being neither residential nor commerical), and how much of a decrease we might see. To be certain, any decrease in costs is most welcome in this tight budget year, but the schools have seen the short end of the stick before. And, the huge jump in energy prices was one of the big hairy monsters in this year’s budget… one we’d like to get away from now with Payless Power.

I realize that watching City Council meetings is almost as boring as watching School Board meetings, but it’s your money. It might pay to pay attention to this one.

FOOTNOTE: Oak Ridge Schools has budgeted $1,081,763 for electricity usage this year.  A 2.5% decrease would yield a savings of about $27,044 — about a quarter-mil short of replacing the lost bus service (just in case you were wondering).