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Bowling Green utilities report $2.7M 2024 power-cost overcollection; board approves reconciliation and a 7% water rate increase
Summary
Utilities staff told the board the city over-collected $2.7 million in 2024 power costs and recommended transferring that amount into the 2025 PCA reconciliation; staff also proposed a one-year, 7% water rate increase to take effect April 1, 2025. The board approved both measures by roll call.
Utilities Director Brian told the Bowling Green board that the city’s 2024 power-supply reconciliation showed an overcollection of $2,700,000 and recommended transferring that sum into the power cost adjustment (PCA) reconciliation for 2025.
The reconciliation, presented under the city’s FAS 71 accounting practice and tied to bond-covenant requirements, compares actual 2024 power-supply transactions to the base power costs used in the PCA. Brian said some months were under-collected and some months over-collected, but the net for 2024 was an overcollection of $2,700,000. He told the board, “the 2,700,000.0 will be transferred back to our PCA reconciliation for 2025 over the next 10 months at you know, 10% each month.”
Why it matters: The PCA is a monthly mechanism utilities use to align customer charges with fluctuating wholesale energy, capacity and transmission costs. Brian said higher capacity and transmission prices in regional markets (including the ATSI zone) are outside local control and encouraged a planned cost-of-service study to recalibrate base rates.
The board then considered a related proposal to raise water rates by 7% for one year, with the increase to take effect April 1, 2025. Brian said the 2025 water revenue budget assumed a 7% sales increase and staff recommended a rate adjustment instead of assuming higher sales. He described the change as a modest monthly increase for a typical household — from about $12.80 under current rates to roughly $13.70 under the proposed schedule, an increase of about $0.90 per month for a representative 500-cubic-foot residential bill.
Board members asked several operational questions. A board member asked whether the university is the largest water user; Brian answered that the university and the district are likely the two largest users and noted that many institutional customers have undertaken efficiency upgrades. When a member asked about future demand, Brian said large projects under construction — he cited an Abbott facility and a north-side data center as examples — could increase water use during construction and operations.
Staff said a formal cost-of-service and rate study for electric, water and wastewater is planned in the 2025 budget to produce a multi-year rate plan. Brian emphasized the preference for smaller, incremental adjustments rather than deferring and requiring a larger single adjustment later.
Action taken: The board approved a resolution authorizing the 2024 power-supply cost reconciliation and a separate resolution authorizing the water-rate adjustment (see “Votes at a glance” article for roll-call tallies and resolution numbers).
