A Crawfordsville City Council committee sought an explanation for the miscalculation that has caused Crawfordsville Electric Light & Power to lose millions of dollars over the past four years.
CEL&P is requesting a 14.5% increase in residential electric bills by 2022 including a temporary rider to make up the under-collected revenue. The new rate schedule received a favorable recommendation Monday from the council’s fiscal affairs committee, with a vote from the full council set for next week.
The utility first noticed a problem in 2018, Utility Service Board President Don Swearingen told the committee, three years after the current rates were approved.
Rates increased as planned at first, but CEL&P hasn’t received all of its money due to a calculation error in the rate design, a small under-collection that benefited customers but left the utility without enough money for planned substation upgrades.
“So in a nutshell, CEL&P lost millions of dollars because of a math error. Does anyone check their work?” councilman Mike Reidy asked.
Kris Wheeler, an attorney for Bose McKinney & Evans who discovered the error, said an engineering firm, which the utility cut ties with, didn’t check its numbers when designing the rate schedule. State utility regulators also didn’t catch the mistake, she said.
“The real world example that I’ve been giving folks is if the utility sold pizza instead of electricity, and they made 105 pizzas a day but five of them were dropped or were wrong or something,” Wheeler said.
“You have to adjust your price per pizza to take into account that you had the cost of 105, but you could only sell 100,” she added. “If you don’t price it right, you’re not to recover all your costs.”
Utility regulators must approve the new rates before they take effect.
In other business, the fiscal affairs committee gave favorable recommendations to annual resolutions finding multiple companies in substantial compliance of tax abatements. None of the companies are receiving full abatements.
A resident’s request for a four-way stop in the alley intersection between Franklin Street and Tuttle Avenue and Wallace Avenue and John Street received an unfavorable recommendation from the traffic, parking and safety committee.
