“Many of you are here because you want to have freedom of choice,” borough solicitor Ed Leymarie told a crowd of over 100 visitors at Monday’s council meeting. “But the Pennsylvania government took away that choice.”
Leymarie was referring to a state law allowing municipalities with government electric departments to require residents to purchase power from them.
Monday’s crowd stemmed from a Facebook group, “Standing Up to Ellwood Electric,” with over 1,000 members. At the agenda meeting on July 11, over 50 residents showed up to protest electric rates and customer service policies at the Ellwood Electric Department. This in turn led to the creation of the Facebook group and an even larger crowd attending the meeting on July 18.
The immediate result of the discussion between visitors and council was to schedule another meeting to have more discussion. Council President Connie MacDonald scheduled the town hall meeting for Monday, Aug. 1. A time and place weren’t decided on.
As explained in a previous article, the Ellwood Electric Department purchases electricity, sells it to residents and uses the profits to fund borough departments in lieu of higher tax millage. This system has been used as long as anyone can apparently remember, although no exact year has been given. July’s electric bills were exceptionally high, causing residents to rally around the Facebook group and attend council meetings.
Despite the confrontational name, visitors were focused on acquiring answers and opening a dialogue with the borough.
Rob Brough, one of the group’s moderators, was one of the first to speak. Brough suggested creating a commission of borough officials and citizens to explore facts and work toward solutions.
He admitted to not knowing much about Ellwood Electric or borough government but that he understood the borough uses the money for public services he believes are important but “maybe taxes will be better.”
Long-term council visitor Jeff Krosovich asked if eliminating the borough electric department would offset the projected tax increases of 5.58 mills. However, the borough’s electric department pays for itself so eliminating it would still create the problem of where to raise the 1.4 million dollars used to fund the police, fire and other departments.
“The service, billing and accounting is horrible,” Krosovich said. “Maybe the borough wouldn’t be spending so much without this money.”
Brian Bush asked several questions regarding the department.
- Could the meters be faulty (answered by Borough Manager Bob Villella that Itron, the meter company, assured the borough that the meters are working properly)
- When was the electric department last audited? (not answered)
- Why does council pay consultants (Utility Engineers) to purchase electricity when running the department is part of council’s job? (not answered)
- Are Ellwood’s industries part of Ellwood electric?
The last question was answered by MacDonald and Leymarie. Inmetco and the Ellwood City Forge aren’t customers because when the Ellwood Electric Department began, it was unable to meet the demands of large industries. Although it can now, those two companies used a legal concept called grandfathering to remain on private providers.
Bush added that the electric rates were oppressively high for people on fixed income and this subsequently hurts the entire community. “If someone had some money to eat at Vinny’s, then they got their electric bill, now they can’t eat at Vinny’s.”
John Cress, a friend of Brough’s and a teacher in the Ellwood City School District, is considering moving into the borough but the electric rates are off putting.
“I understand taxes are a necessary evil, but they are at least transparent. The electric rate isn’t transparent. I’m thinking about living in Ellport instead, so why wouldn’t I want to be away from all this drama?”
Another resident said he was selling his house because of the electric rate but is having a hard time finding a buyer because of the electric rate.
“Why are we paying for overpaid, rude employees?” he said, regarding the electric department’s staff.
He added that he’s experienced tremendous difficulty getting answers to any questions regarding the electric department.
Lisa Guerrera said she’s talked to over 150 people on Facebook who’ve had difficulty paying their bill while affording over necessities such as groceries.
Guerrera suggested that if the borough eliminated its electric funding, council would be forced to live within the borough’s means. She added that the department’s service is horrible.
Many residents also expressed a desire to choose between a fixed rate and variable rate for billing.
Borough Manager and Borough Solicitor’s Responses
Following visitor comments, Villella presented information on borough’s electric rates. He described July’s billing as a perfect storm.
Council recently entered a five-year energy-purchasing contract to stabilize rates but shortly after, transmission rates increased. Transmission rates are a multi-state phenomenon out of the borough’s control. Villella said the increase in transmission rates was dramatically incorporated into residents’ billing via Rate Adjustment.
In addition, Villella said consumption has increased for the summer months in a manner consistent with 2015. June was a far hotter month increasing air conditioning consumption. For the period of April 28 to May 6, there were 20 days where the temperature was in the 60 degree range and lower. Only two days were in the 80 degree range. For the billing period now due, there were 20 days above 80 degrees.
July’s billing period covered a larger span of time: 33 days from May 27 to June 29. June’s billing was from April 28 to May 6, a period of 29 days. This is a 12 percent increase.
After Villella’s explanation, Leymarie took the floor. He said he wasn’t opposed to a private provider, but that is council’s choice, not his. However, he urged residents to have realistic goals.
“We can’t just walk away [from Ellwood Electric]. This would have to be done in an orderly fashion.”
Leymarie estimated that the borough has $10 million in assets through the electric department, which has been funded for by borough citizens, and to make the switch, steps would have to be taken so that those assets aren’t wasted.
He pointed out that many cuts have already been made in the borough departments, including reducing the fire department to part-time. “When I started here, we got a check from the state government to cover the entire police department.”
Jarrett Gibbons Speaks
At the conclusion of the meeting, State Rep. Jaret Gibbons, D- Beaver/Butler/Lawrence, was asked to speak. Gibbons, along with Senator Elder Vogel, R-Beaver/Butler/Lawrence, were contacted by residents petitioning for help.
Overall, Gibbons emphasized that Ellwood’s problem was local and required a local solution. He said that between him and Vogel, they have not had complaints from their other municipalities with electric departments. He also said that he didn’t understand what the rate adjustment was.
“If we made a state law addressing Ellwood City, it may not be what is best for Wampum, New Wilmington or Zelienople.”
He added that the PJM was a private organization that controlled the power grid for 13 states and that the Pennsylvania government has no authority to negotiate with it. Transmission rates have increased partially because coal plants in western Pennsylvania closed, so power must be transmitted over longer distances.
“Basically, if you want to switch to a private provider, then do it, if you want to stay municipal, then do it,” Gibbons said.