Budget season in Lansdale could have another rate increase to consider for 2024.
Council has begun talks on studying whether an increase in electric rates, for the first time in nearly a decade, will be needed.
“We haven’t done a full electric rate study since 2020. Electric rates haven’t been adjusted since 2015,” said Electric Superintendent Andy Krauss.
In December 2022 council approved a $63 million 2023 budget with a one-mill tax increase, the town’s third in four years and 16 percent over the prior year’s levels, and said that added revenue would be used largely for adding new police officers, a public works crew, and other new staff hires in the finance and parks and recreation departments.
The electric department has transferred roughly $5 million in revenues from electricity sales to the general fund in each recent year, and that trend will continue in 2023; according to the budgets, electric revenues total roughly $20 million per year, largely from sales of electricity to local residential, commercial and industrial customers, while wholesale electricity costs are roughly $10 million. Roughly $5 million is transferred to the general fund to cover other town expenses, and roughly $1 million has gone to the town’s capital fund and about $700,000 to the debt service fund in recent years.
Since the 2023 budget was approved, council committees have continued talks on the various infrastructure needs around town, and raised the possibility of a long-term bond borrowing to do so, while approving the town’s first sewer rate hike since 2015 that’s set to take effect in September.
During council’s August 2 meeting, Krauss gave an update on an item he would have brought before the electric committee that night, but that group did not meet due to a lack of quorum: a big-ticket item on the department’s project list for the upcoming year.
“Right now, we’re currently looking at a $1 million protection relay project, down at the main substation. There is money in the capital (fund) for that currently, but that’s a big hit to that capital budget,” he said.
“That electric revenue at the end of the year goes into all the other funds. I know those other funds have real needs: not only the parks and rec department, public works, we help fund the police department — some of those things your electric revenues go to help those other departments, real needs,” he said.
Early internal budget talks have centered on unfunded mandates for police record systems and infrastructure repairs such as road repaving and sinkhole fixes for public works, Krauss told council, and more revenue via electric rates could help that department tackle those, plus its own needs.
Since the committee did not formally meet in August, Krauss added, that group could formally vet the request to update the rate study when they meet in September, then full council could approve the request at their September action meeting.
Mayor Garry Herbert then added that the borough’s electric rates were still competitive with those charged by the area’s two major utilities, PECO and PP&L.
“We’re not doing a rate study because our rates are out of step with anyone else. Our rates are competitive, they have been for a long time — in fact, I think we’re still cheaper,” Herbert said, and Krauss confirmed: “We’re currently cheaper, residentially, right now than both of the investor-owned utilities in the area.”
Lansdale’s borough council next meets at 7 p.m. on Aug. 16, and the electric committee next meets at 7:30 p.m. on Sept. 6, both at the borough municipal building, 1 Vine Street. For more information visit www.Lansdale.org.
This article appears courtesy of a content share agreement between North Penn Now and The Reporter. To read more stories like this, visit www.thereporteronline.com.
See also:
Sen. Collett Calls for $100 Million in PA Budget to be Redirected to Adult Mental Health Services
Towamencin Awards Contract for New Comprehensive Plan
Details, Timeline For New Hatfield Police Station Unveiled At Township Meeting
North Wales Zoning Update, Business Alliance Talks To Continue In August
White's Road Park Receives PECO Open Space Grant
