City officials are exploring their options in the wake of an electric bill projected to increase by over $100,000.
The city has dozens of electric accounts — the city building, sewer plant, DPW garage, parks and each traffic light — and Acting City Manager Mike Holtz said the “city is looking at a $100,000 increase in electric across all bills.”
The city’s electric contract runs out at the end of the year which means, amid volatile energy markets, a decision has to be made.
Officials were looking at a 20 to 24 months contract but the rate, Holtz said, spiked by nearly .01 cents per kilowatt hour between Friday and Monday, attributed to the snow that has blasted Buffalo.
“We don’t want to lock up any more than a year,” he added, “hoping they’re (prices) going to come down.”
Mayor Dave Wortman said that as an active participant in energy markets the current level of volatility is “unprecedented,” never seeing before the day-to-day swings seen in the last nine months.
The decision before council was to lock in a one-year term with a cap or wait, running the risk that prices may go down or may rise.
Wortman said he would be “really hesitant” to lock in for longer than 12 months, though.
Holtz added that the city can negotiate lower rates in the next year under the terms of the one-year agreement. He also explained that, while the city “didn’t budget the whole $100,000 increase, “we’re covered for this $100,000. (There is) enough of an increase (in the budget) it’ll be built in.”
Wortman said five firms all provided “relatively close” rates.
“We’re hoping to get a downturn as the market fluctuates,” he said.
“I think there’s some sense to have certainty,” Councilman Maurice Cashman said. “I don’t see any risk or downside to this whole thing, locking in tonight.”
Concerns were raised that the forma agreement was not before council, which ultimately delayed the decision to a special meeting on Dec. 12.
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November 28, 2022 at 02:32PM
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