Hillsdale College is paying more for electricity than it was six months ago. Just how much is a point of contention between the Hillsdale Board of Public Utilities and the city’s largest consumer of power, the college.
Back in March, the BPU made some changes to its electricity rates. Because of those changes, college administrators say they will be charged more than $100,000 a year extra for electricity.
Director of BPU Rick Rose, however, contested that number, saying the new costs, while higher than before, are less than $100,000.
But college administrators stand behind their calculations.
“The numbers aren’t lying,” Energy Education Specialist Tim Wells said. “We’ve seen the increase.”
In a letter sent to the BPU in August, Chief Administrative Officer Rich Péwé raised concerns about the higher energy costs. He requested that the board would consider working with the college “to avoid and offset” the increase.
Wells said that, while energy costs fluctuate month to month, the electrical demand charges have been consistently high since the new rate structure went into effect. Hillsdale College has 99 accounts with BPU.
By projecting the current electrical costs over the next 12 months, Wells came up with the $100,000 figure, or about a 27 percent annual increase from the pre-March costs.
Wells said there could be a small margin of error due to the fluxing energy costs. Even so, he said, a 7 or 8 percent difference either way would still mean a substantial increase in overall energy costs.
Rose doubted the college would see such a large increase in its electricity bills.
“The analysis — or lack of analysis — in the letter itself disturbed me,” Rose said.
He said because of how much energy costs fluctuate, projecting costs over the course of a year wouldn’t rightly reflect what the college will pay.
Costs have been going up for the energy BPU buys and pumps to the buildings of its roughly 6,800 accounts, according to Rose. The BPU began a subsidy program several years ago to offset those costs.
They spent $2.6 million over five years as part of the program. Its reserves fell to $2 million and Rose and the board decided to stop the subsidies, resulting in the rate restructuring last spring.
Costs rose for some accounts and stayed the same for others, Rose said. He denied that the college was being “picked on” by the BPU for having the most money in town.
Rose said he is currently analyzing Hillsdale’s accounts. Once done, he will reply to Péwé’s letter.
The college and BPU recently resolved an issue separate from the rising costs.
BPU was overcharging the college for energy in Simpson Residence. Simpson was mistakenly placed in the wrong rate category, Wells said.
This past summer, college administrators called the BPU, informed them of the mistake, and they placed Simpson back in the correct category. The building’s energy costs dropped.
