Zelie OK's power changes
ZELIENOPLE — An increase in the borough's contribution to the Pennsylvania Municipal Electric Association will help hire a full-time executive director — part of an overall plan to strengthen the organization and its members, officials said Monday.
During a meeting of Zelienople Council, manager Don Pepe said the PMEA board met to create a strategic plan, spurred by discussions about public power in the legislature.
On Tuesday, Pepe said there have been various pieces of legislation in the past few years that have threatened the way boroughs conduct electricity business. One piece would have taken away a borough's ability to transfer electric funds to the general fund, which Pepe said would have had a major impact on finances in Zelienople.
“It would have forced us to have to generate additional tax revenue,” he said, adding that would most likely mean raising taxes to nearly 50 mills to keep the same budget pace in the borough.
Vance Oakes, borough manager for Grove City and PMEA president, told council that 35 boroughs in the state are in the electric business, including Zelienople. He said until recently these boroughs have been able to “fly under the radar,” but recent attention has led to frank discussion among members.
“We haven't worked well as an organization as a whole,” he said. “We need to be better at explaining and promoting public power.”
To do that, Pepe said, the organization intends to hire a full-time director that will provide day-to-day assistance for boroughs that may face issues. It will also allow the organization to have a presence with the legislature, as the director will be a registered lobbyist.
The director periodically will visit each borough and hear concerns from council members, Oakes said. He or she will be a non-voting member of the association, and will take direction from the board, which Oakes said was an important piece moving forward.
“In order for this to work, our board of directors is going to have to become a smaller but much more active board of directors ... and give that paid executive some more guidance,” he said.
The director also will work to promote the concept of public power to residents living in those boroughs and beyond. Pepe said there are misconceptions about how public power works, even for residents of boroughs where it is used.
“The need for promoting public power is really important,” he said.
Pepe said bills often look and are broken down differently than a typical power company bill, which can lead to the feeling that bills and rates are higher.
However, Pepe said that is not the case, and generating revenue through electricity sales is a more progressive way of putting funds in the borough's coffers. It also gives them the ability to make money off properties that are otherwise tax exempt, as those properties still use electricity.
He added while the PMEA is not regulated by the state Public Utility Commission, Zelienople voted three years ago to mirror the regulations set forth by the PUC as a means of protecting consumers. He said he hoped other boroughs follow suit.
“We want to make sure that we do this correctly,” he said.
To help fund the position, PMEA dues and structure would change. Pepe said dues are currently based on the amount of electricity generated, and would be changed to a $5-per-meter fee. That would increase the borough's contribution from about $1,000 to $10,000 per year.
“That's important, because to be able to provide those services, that fee structure needs to change,” Pepe told council.
Oakes acknowledged that some boroughs may find the fee too high and may reconsider their PMEA membership. However, he said 27 out of the 35 voted unanimously on the proposed changes, and the organization's budget is based on an 80-percent participation rate.
Council unanimously voted for a resolution in support of the bylaw amendments and restructuring.
“We have to protect this asset, there's no way around it,” Council member Mary Hess said. “We have to make this move.”
Oakes said other member boroughs would be asked to do the same in the coming months.
