After the Marquette Board of Light and Power (MBLP) proposed an 8.5 percent rate increase, a work session with the Marquette Board of Commissioners was held to discuss the proposed increase. The MBLP will present commissioners with a formal proposal Monday, August 26.
The proposed increase averages out to $4 a month for customers using 500 kilowatts a month. Rates will go up for each of the next three years.
The increase has to be approved by the city commission.
MBLP has some of the lowest electric rates in the state, but the plant is also home to outdated equipment that needs to be replaced or updated.
"Some of our substation equipment is old. Our newest unit is 30 years old. Our cost of service is higher than what we're producing electricity for, so we're having to increase rates to get back to costs of service," said John Reynolds, Director of Generation and Engineering.
Over 16,000 customers get their electricity from the MBLP. When equipment fails at the plant, MBLP has to turn to a grid to purchase power for its systems, and the price of power is constantly changing.
"Currently we are generating 44 megawatts on unit number three. If that were to trip, we would have to buy all of that energy from the grid and that would be 44 times 225 megawatt hours per hour. That'd be $9,900 an hour in energy cost," said Tom Carpenter, Superintendent of Production.
In the last 30 years, there has only been one rate increase for MBLP customers.
The plant said they delayed the increase a few years ago because they did n o t want to put a rate hike on customers during the economic downturn.
If the rate increase is approved, it could go into effect this fall.