SOUTH RIVER — The debate over the borough’s electric rates has been a charged political issue.
At the Borough Council meeting on Sept. 14, sparks began to fly as Democrats accused Republicans of lowering rates as a political maneuver ahead of the November general election.
The council voted to lower the electric rate in the borough by one cent across the board. Currently the cost for a kilowatt-hour is 22.7 cents. Taking effect on Sept. 28, the new electric rate for the October billing cycle will be 21.7 cents.
“This ordinance change … is a great reduction for all classifications, all electric users,” said Council President Jim Hutchison.
All users, including residents, businesses and nonprofit, will be affected by the change in rates for South River Electric, the borough’s utility.
According to Hutchison, on average residents can expect to save four percent on their electric bills with the new rate.
For Mayor John Krenzel, the rate reduction is the fulfillment of a promise he made earlier in the year.
“It was a promise that I made that we were going to rely less on the electric utility,” said Krenzel.
“We had to work to get our fiscal house in order, which we have done. Now because there is extra money, we are going to lower the rates for everybody.”
According to Krenzel, the move will mean that the borough will collect around $121,000 less in electric bills for the remaining three months.
According to the 2015 municipal budget, South River collects about $15 million in revenue from the electric utility.
According to Hutchison, the borough can absorb the lost revenue because returns have been better than expected from the electric utility.
“We raised the rates last year and we had a very warm summer. When you have a combination of increased rates and a very warm and dry summer, we are a summerpeaking electric system. People’s electric bills are more prone to rise in the summer [when they are] running air conditioning,” said Hutchison. “Because there is more demand, that generates more revenue.”
Hutchison estimates that the borough collected an extra $400,000 in revenue than was previously forecast.
With this being an election year in the borough and the new rates taking effect a month before, Democrats are calling foul.
“For all the talk of getting politics out of this, it seems we are putting politics back in,” said Councilman Shawn Haussermann, one of two Democrats on the Borough Council. The other Democrat on the council is Jim Jones.
Despite welcoming the rate cut, Haussermann also criticized it, noting that at the beginning of the year the council had raised electric rates in the borough by 4 cents.
Normally, the borough administrator would give a report on power cost adjustment to the council in November, and the council would vote on an adjustment in December for the next year, said Haussermann.
“Instead of waiting until January to kick in, my view is let’s do it now, let’s do it permanently,” said Krenzel.
The ordinance passed unanimously.
Contact Michael Nunes at [email protected].