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Martinsville, Virginia 24115
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Council may end stabilization fund
Electric rate program is depleted

Monday, April 21, 2014

By MICKEY POWELL - Bulletin Staff Writer

Martinsville City Council on Tuesday will consider officially ending the city’s electric rate stabilization program fund because it has been depleted.

In 2012, the council set up the fund to keep electric rates constant as the city stabilized its costs for wholesale electricity through 2015, as well as to help pay Martinsville’s costs toward a ceased power plant project.

Through the program, Martinsville has paid American Municipal Power (AMP) $69.97 a megawatt hour for wholesale electricity. That amount is more than rates often charged recently for power on the wholesale market. The extra money went into a trust fund to help pay off the power plant costs.

AMP discontinued developing the plant after costs suddenly rose sharply.

In March, the council imposed on city electric department customers a rate hike of a little more than a half-cent a kilowatt hour. The increase, effective with bills issued May 1 and afterward, will enable the city to pay an enormous wholesale electricity bill it received in January and offset anticipated future increases in wholesale power prices, officials have said.

January’s frigid temperatures resulted in city customers using more power than usual to heat their homes. The city had to buy the extra power on the wholesale market, instead of from AMP, at inflated prices because of heavy demand by many public and private utilities. As a result, the city’s bill was about $1 million more than officials expected.

To help pay the bill, the city took $551,881 from the stabilization fund, which depleted it, a report in the council’s agenda packet shows.

Now, the council must authorize City Manager Leon Towarnicki to send AMP a letter to terminate the stabilization fund immediately, the report shows.

The council will consider giving that authorization when it meets at 7:30 Tuesday night at the municipal building on West Church Street uptown.

Also, a public hearing is scheduled on proposed zoning ordinance changes that would temporarily allow land to be used for certain light industrial and commercial development as the ordinance undergoes an overhaul.

Following the hearing, the council will consider adopting the ordinance amendments on first reading.

Other agenda items will include:

• Setting a public hearing for May 13 on the city’s fiscal 2015 budget proposal.

• Considering routine-type budget amendments for the current fiscal year.

• Recognizing city Fire Chief Kenneth Draper for completing the Executive Fire Officer Program of the National Fire Academy.

• Presenting proclamations pertaining to National Correctional Officers Week, Delta Sigma Theta Sorority and Nurses Week.

• Hearing updates on the Integrative Centers for Science & Medicine, the Martinsville-Henry County Historical Museum and the city farmer’s market.

• Nominating council members to serve on Virginia Municipal League policy committees this year.

• Hearing business from the floor.

At 6 p.m. weather permitting, the council will tour the New College Institute building under construction on the Baldwin Block uptown before going into a closed session at 7 p.m. to discuss possible appointments to local boards and commissions as well as contractual and investment matters.

The council has scheduled budget work sessions for 6-9 p.m. Wednesday and Thursday to consider capital project and departmental requests for the new fiscal year that will start July 1.


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