The Oxford Electric Department presented its budget for the 2018 fiscal year to the Oxford Board of Aldermen last week that includes a 1.5 percent rate increase.
In the proposed budget, presented by Superintendent Rob Neely, OED estimated total spending of $23,282,267, offset by expected revenues of $23.388.963.
OED’s largest expense is purchased power from the Tennessee Valley Authority.
“The greatest challenge when preparing an annual budget is projecting electric sales revenue and purchased power expense,” Neely said. “I spend a considerable amount of time preparing estimates for FY2018’s energy costs, which causes the expenses and income of OED to rise and fall.”
More than 74 percent — or about $17 million — of OED’s revenues go toward paying TVA for energy.
The 1.5 increase is expected to be handed down from TVA in October and is estimated to cost the typical residential customer $1.50 more a month, based on a $100 monthly electric bill.
“According to TVA, we can expect these incremental rate increases for another five years,” Neely said.
On Friday, Neely reported that the department’s change over to using Automated Metering Infrastructure, or AMI, was complete in February. The new system allows meters to be read at OED rather than manually in most cases.
“The benefits include reduced truck rolls for disconnecting and reconnecting electric service, meter reading accuracy, reduced time and money spent manually reading meters and customer service,” he said. “It gives us a great leg up on customer service. We can tell people exactly how much energy they are using and what time of the day.”
Neely said the change to AMI has resulted in the loss of only one employee who was hired as a temporary worker originally.
Projects to move utilities underground for 2018 includes Scott Street, Haley Street, Phillip Road, Leighton Road and Douglass Drive and Williams Avenue.
As of March 31, OED provides electric service to approximately 9,490 electric customers — 7,495 residences, 1,699 small commercial businesses, 231 medium commercial businesses, two large commercial businesses, 15 street and athletic areas and 48 lighting installations.
“This marks a 2 percent increase in electric customers over the calendar year,” Neely said.
The fiscal year for OED runs July 1 to June 30.
For most other city departments, the fiscal year runs from Sept. 30 to Oct. 1. Department heads will begin presenting their budgets for review to the Board of Aldermen in June. The final FY2018 budget must be approved by Sept. 15.