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Bowling Green utility officials present five-year plan that would raise residential bills beginning in 2026
Summary
Public infrastructure director Brian O'Connell told council a rate study shows revenues no longer cover costs and proposed a 7% increase in 2026 followed by 5% annual adjustments through 2030, plus short-term borrowing to meet debt-service and capital needs.
Public infrastructure director Brian O'Connell presented a cost-of-service rate study to Bowling Green City Council outlining a multi-year plan to stabilize the electric utility’s finances.
O'Connell said the study identified three primary problems: "current revenues do not meet the current expenses," the city will not meet its debt-service coverage ratio in 2026 and 2027 for the JV5 Belleville hydro project under the current rate structure, and the electric fund balance will be insufficient to cover future capital projects. To address those gaps, he proposed a 7% rate increase in 2026 and 5% increases each year thereafter through 2030, $7 million in borrowing in 2026 and $500,000 in 2027 via AMP's rate stabilization program, and an additional $15 million borrowed over a three-year period to support capital projects.
"We would pay this loan money back in years 2028 through 2031," O'Connell said, describing the AMP requirement for multi-year repayment and the goal of smoothing rate impacts. He said the borrowing would allow smaller, phased adjustments rather than a single large increase that could otherwise be "upwards of 20%" in early years.
O'Connell also recommended shifting more of revenue collection into fixed charges. Under the proposal the monthly residential customer charge would rise from $14 to $21 in 2026 (a $7 increase) and then increase by about $5 per year thereafter; O'Connell said the energy charge per kilowatt-hour would remain at about 13.136¢ in 2026. He explained that by increasing fixed components, the analysis shows the city's existing monthly facilities charge (a separate rider previously used to allocate costs) would not be needed after 2027.
On rooftop solar policy, O'Connell said the avoided-cost model drove prior payments for excess generation and recommended raising the buyback rate to 9.5¢ per kilowatt-hour (from 7.5¢) for 2026 to reflect higher energy market prices.
Council members asked clarifying questions and noted competitiveness with neighboring utilities. One member said he appreciated the study and that even after the proposed increases the city would be "extremely competitive relative to other municipalities." O'Connell said early comparisons to Toledo Edison’s winter rates showed the proposed 2026 rates would remain below that benchmark, though he cautioned some components and exact comparisons would change when Edison’s new PUCO-approved rates take effect.
The presentation did not include a formal council vote; O'Connell said materials and the meeting recording are posted on the electric rate web page for public review and indicated staff will return with formal proposals and implementation steps for council consideration.
