Huntingburg council approves revised gas rate increase, public hearing set for April 22

The Huntingburg Common Council voted to introduce an ordinance to increase gas rates by approximately 16.5 percent, a reduction from the 24 percent increase initially proposed.

The decision comes after council members rejected the original plan and directed the city attorney and financial advisor to revise the proposal to lessen the impact on residential consumers.

The revised plan reduces the cash revenue requirements at the gas department by $250,000 and modifies the structure of the rate increase, shifting more of the burden to the monthly base charge rather than volume charges.

Under the new plan, the residential base charge will increase to $12.50 instead of the current $7.40. The volumetric charge will increase by 85 cents per MCF (thousand cubic feet) for all customers. The total revenue increase sought has been reduced from approximately $950,000 to $675,000.

According to officials, this marks the first gas rate increase since 2013. The long period without rate adjustments has contributed to the department’s current financial challenges.

Council members Steve McPherron and Tim Wehr asked if they should implement the new rates in multiple phases. Buzz Krohn, the city’s financial advisor, said it would only require City Attorney Phil Schneider to amend the presented ordinance. Schneider and Energy Superintendent John Reutepohler advocated for immediate implementation, citing the gas department’s urgent financial needs.

“The gas department needs relief now,” Schneider advised. “To phase it in is going to delay the relief that they really need. They’re burning through cash at the rate of, I think, about 200,000 (dollars) a year or more over and above revenues.”

Mayor Neil Elkins pointed out that delaying the full increase would cause the city to miss capturing revenue in the upcoming high-usage months.

Councilman Glenn Kissling expressed similar concerns about the department’s financial stability. “Our gas department is in trouble,” he said. “If you took that financial statement to the bank, I don’t think they’d give us a loan. So I think we need to get the cash flow going and get it done.”

Wehr said though he understood the financial issue the gas department was facing, he was concerned this would be another hit for residents after the wastewater increase that was needed with the mandated improvements at the city’s wastewater plant.

Councilwoman Pam Bolte said that the structure of the increase would naturally create a phased effect. “If we’re doing part of it on the base rate, that’s going to be a little jump now,” she explained. “Then they’ll have through the summer months to kind of adjust, and then what is on the usage will happen in the fall and winter.”

Krohn provided rate comparisons showing that the city’s gas rates remain competitive even with the increase. “When you look at where you are with CenterPoint Utilities, which is a for-profit investor-owned utility and they serve more residential customers throughout the state of Indiana than anybody, you’re significantly less than they are.”

The council voted unanimously to introduce the ordinance. A public hearing on the rate increase is scheduled for April 22 at 5:30 p.m. in the Council Chambers.

The council also discussed plans to standardize connect and reconnect charges across all utilities. Currently, gas connect and reconnect charges are higher than those for water and electric service. The council plans to bring all these non-recurring charges to the same level at a future meeting.

The council also approved Commonwealth Engineering preparing bid packages for work at the Water Treatment Plant to repair two leaking filters. See the story attached below. Water Superintendent Jerry Austin recommended the estimated $1.2 million project be paid for with about $600,000 in water utility funds and a $600,000 loan from the Energy Department.