TRAVERSE CITY — Electricity rates for Traverse City Light & Power customers 62 and older could increase by 11 percent a month.
That will cost an average of $4.54, according to the utility’s calculations.
Priscilla Phifer said that’s about a meal and a half at the Traverse City Senior Center, where she eats lunch almost every day.
She’s signed up for the senior discount, along with 1,282 customers, according to documents.
“I don’t get no retirement, I live on Social Security so an increase on anything hurts,” she said.
Utility board members unanimously agreed at a recent meeting to set an Oct. 22 hearing for the rates, TCL&P Executive Director Tim Arends said.
It’s part of a plan to simplify the city-owned power company’s rate structure, he said.
The increases will more closely align what TCL&P charges for power versus what it costs to provide it, Arends said.
He likened it to a water or sewer bill, where residential, commercial and industrial users each pay a different rate based on the cost of serving them.
“We’re not going to pick winners and losers, we’re just simply going to a model where we charge customers what it costs,” he said.
TCL&P customers signed up for the rate would pay a flat $6.50 per month, plus 8.8 cents per kilowatt-hour for the first 16 kilowatt-hours per day, documents show.
Compared to the current $4.50 per month and 8.2 cents per kilowatt-hour, that would be an 11.6-percent increase.
Those signed up or senior water heating and senior space heating would see similar increases — the 93 senior water heating customers would pay $6.50 per month instead of $4.50, and 8.8 cents per kilowatt-hour instead of 8.36 cents.
Residential water heating and space heating rates would change by fractions of a cent as well, documents show. The former would decrease while the latter would increase.
New prices would take effect Nov. 1 if utility board members approve them, TCL&P Controller Karla Myers-Beman said.
Board members in 2020 could consider an increase for all ratepayers that would amount to 2.5 percent overall — some rate classes would see a bigger increase, others a smaller one.
Proposed rates are in line with a five-year plan based on the findings of a study completed in 2018, Myers-Beman said. The plan called for phasing out senior rates over three years, and utility board members in October will weigh prices for the second year of that phase-out. Senior ratepayers would pay regular residential rates afterward.
Current residential rates are $7.50 per month, plus 9.21 cents per kilowatt-hour for the first 16 kilowatt-hours per day, documents show.
Ron Bohn, who ate lunch next to Phifer Thursday, said he’s against getting rid of senior rates — he was unsure if he’s signed up but wants to be. A $4.54 per month increase wouldn’t hurt him too badly, but he’s still opposed on principle, he said.
Seniors deserve whatever discounts they can get and face increasing costs all around, Bohn said. Rising costs of living mean the 73-year-old has to work part-time where he didn’t have to before, he said.
Phifer said many seniors are on a fixed income and have more doctor bills and medication costs to pay than others, she said. She’s hopeful the rate increase doesn’t pass.
“It’s not only seniors, it’s young people, too,” she said. “They’ll be a senior some day if they live.”
Myers-Beman said ratepayers impacted by the increase potentially could offset higher prices through the utility’s energy efficiency programs. Utility customers can get rebates for installing energy-efficient light bulbs and other power-saving electronics. TCL&P also is considering an on-bill financing program to help customers pay for bigger projects like new insulation and windows.
Arends acknowledged the increase will impact senior citizens. The utility works with customers on payment arrangements to deal with the “peaks and valleys” in their monthly electrical bills, and area nonprofits help those in critical need.
TCL&P’s residential rate is nearly the lowest in the state, Arends said.
“So I realize this is an increase for that customer class, however they’re going into a class that is still the third-lowest in the state,” he said.