It has been a cold winter. There’s no denying that, but some residents say that their utility bills are too high regardless. A few of those residents came to the city council meeting last week demanding some answers.

“We have not raised the rates,” said Piedmont Mayor Brian Young.

“Nobody in this room believes that you have not raised the rates,” answered one resident.

On this, the mayor is correct. The city’s current residential rate is set at 10 cents for each kilowatt-per hour used. It has been the same since it was lowered in May of 2009, down from 11 cents-per-killowatt. The base rate of $12.75 has remained the same since it was raised in Oct. 2008.

If you’re still skeptical, take out your utility bill, multiply your usage by .10 and add the $12.75 base rate. The problem, according to Young, is a bit more complicated.

“If you go to Jacksonville, their gas rates are a little cheaper than ours,“ said Young. “But they are run by an independent board. We’re run by a city. Our rates were more competitive back when it was an independent board, back prior to 2003.”

Proceeds from the utilities are currently funneled directly to the city.

“It’s all transferred into the general fund and then of course (the city council has) the discretion to spend that,” said Piedmont Utility Manager Lee Young, who believes, as does the mayor, that rates could be lower, if it were out of the city’s hands.

“There’s not as many hands in the pot,” said Mayor Young. “If you’ve got money, everybody wants a piece of it, and the utility department generates a lot of revenue.”

Mayor Young said he believes this is the third time the city has been in charge of running the utilities.

“The city ran the utilities, went broke basically. Independent board got them, built it back up and then the city took over, went broke again basically,” said Mayor Young.

So where is the money going once the city gets it?

The Police Department is under a hiring freeze so it isn’t getting it all, and there aren’t any new buildings in town, or major renovations of existing ones. The city will be combining efforts with Centre and Cherokee County to repurpose an airplane hangar at the Centre-Piedmont-Cherokee County Regional Airport but the total final expenditure to the city, after the $46,900 loan is paid back, will only amount, according to Mayor Young, of a few thousand dollars.

“We’ve just basically patched and repaired,” said Mayor Young. “And I don’t think anybody would think that’s a good long-term view for any utility, city, business or anything.” Young says much of the money is being used to pay back old obligations.

Young said that when he took office he met with Fred Clark, President of Alabama Municipal Electric Authority (AMEA). AMEA is where Piedmont purchases its electricity.

“He told us that he was going to need payment on our bills because we had not paid our electrical bill, I think it was right at 90 days,” said Young. “It was several hundred thousand. I think six (hundred thousand) or so altogether due. He told us if we didn’t get some payment on it he was going to force us into receivership.”

Young said the city borrowed some of the money from Farmers & Merchants Bank, leaving some of the debt with AMEA until the city could pay it off fully. Young said that the city is about $100,000 to $120,000 from having the loan paid back.

Until utilities are placed back in the hands of an independent board, Lee Young said rates are going to be higher than necessary.

“People have to understand that as long as the city is transferring everything, everything out of the utilities, and not putting a lot back into it, that rates are going to be high.” said Young. Reserve funds are one way, Young said, that independent boards can smooth out the fluctuating costs of energy.

“In January of 2001 gas prices quadrupled overnight, “ said Young. “From December to January. And yes we went up on rates, but nowhere near enough to cover that. We were able to carry that (cost) over several months and not kill people with just an instant rate hike.”

In addition, by purchasing gas in the summer when prices are low, the city can pass that saving on to the residents. But without a reserve that savings, said Young, isn’t possible.

And the city already has an independent board in place, but is no longer active.

“That old three member independent board is still in existence,” said Lee Young. “It just basically gave the city its assets, but it’s still in place. All that would need to happen is for the city to agree to transfer those assets back to the board.”

The board is made up of Terry Conaway, Herb Davis, and Jerry Harbour.

When asked if the city council would vote in favor of an independent board, Mayor Young said that it is a possibility.

“I think some of them are know realizing there’s a lot more to it than just spending the money, and now the money’s gone, there’s not any money to spend and now your getting the pressure from it,” said Mayor Young. “I can just about promise you, before I leave office, I’ll probably find out. We’ll get to vote on it and see, because if they don’t vote for it, I think that will get pushed against them. I just think it’s something that just needs to be done.”