CHIPLEY – Chipley City Council unanimously passed an amended natural gas ordinance Tuesday, which will lead to a fixed-rate rate hike about double that of current rates. The new fixed rate goes into effect Oct. 1.
The hike comes as a result of the City operating its natural gas utility at a deficit – losing about 12 percent of customers over the past five years and costing the city tens of thousands of dollars annually more than it generates, according to a Florida Gas Utility (FGU) rate study for the City’s natural gas utility.
“We’re losing money and we can’t continue operating (the gas utility) without doing something,” City Administrator Dan Miner said regarding the vote at Tuesday’s meeting. “A lot of people are not going to look at it as a good thing, but it is a service we do provide for our citizens.”
“We’re just trying to cover our costs,” he added.
The council meets at 6 p.m. on the second Tuesday of the month at City Hall, 1442 Jackson Ave.
Increased rates are expected to generate a $27,188 – a 17.41 percent rate increase -- profit in its first year and culminate, in its third year, with an overall annual revenue of $77,188, which is about a 50-percent total natural gas rate increase per customer.
The unanimous vote reflected the council’s overwhelming approval of the over-due rate hike.
“Our auditor for the last several years have said ‘listen, you really need to look at your gas fund because you’re continuously losing money.’” Miner said. “All of the council members realized that we got to make this rate change to make it affordable to customers and at the same time pay for itself.”
Other features of the new billing system include: differentiated rates for residential and commercial, fixed rates for all customers, one rate for all consumption, and implementing a new customer charge on residential and commercial.
The FGU study also showed Chipley possibly having the lowest natural gas rates in the state; whereas several other cities of similar size may average, on a minimum bill, between $18-$31 per month for residential before fuel, taxes and fees, a Chipley customer bill slumbers at just $6.30.
While all customers will eventually pay more for gas, as city officials discussed at Tuesday’s meeting — intermediately and as a result of the fixed rate — customers who currently use small amounts of gas will see a fee increase; while those who have more usage will pay less.
Industrial customers will not be affected by the hike, the FGU study states.
Also at Tuesday’s meeting:
Chipley City Council approved ordinance No. 942, which updated zoning language to reflect a non-refundable $500 fee to file an application for rezoning.
The City approved the TRIM schedule and 2017-18 budget. The millage will be tentatively adopted at a budget hearing at 5:50 p.m. on Sept. 12 at City Hall, 1442 Jackson Ave.
City officials also confirmed Brock Tate for Recreation Director and James Cook for Water Utilities Director.