The need for a new electric utility rate structure

By Joe Kleinknecht

Joe Kleinknecht

By Joe Kleinknecht

Joe Kleinknecht Kleinknecht

For years Galion electric utility rates for residential customers have been comparable to or lower than surrounding areas.

However, our electric rates for large consumers, or the business and industries that employ our citizens and make it possible for them to live in our community, have been 15% to 18% higher than those in surrounding areas.

The problem with this is that this means there is a cost of doing business in Galion that employers don’t have in surrounding communities or even other states that they operate in. So, this is additional operating cost month after month that their competitors do not have, or to put it another way, a cost they have to put into their products or services that their competition doesn’t have to.

With this being true, how do we expect to maintain or attract new businesses and industries or expect our existing business and industries to survive?

I believe this new rate structure addresses this issue and levels the playing field for our larger consumers. Yes, the rates will go up slightly for our residential customers and no one ever wants that to happen, however, maintaining and growing existing businesses will be the only way to control the residential cost of electric in the long term.

As most of us know, Hydraulic Technologies Inc. is leaving Galion and will be completely closed by the end of this year putting approximately 70 people out of work and causing us to lose one of our largest electric customers.

I say this, because it would only take the loss of one or two more major consumers like HTI to shift more of the cost of operating our electric utility to all of our remaining customers, including residential. This is something we can ill afford to have happen.

In the last two retention & expansion surveys done in Galion by the Crawford County Economic Development Partnership, without exception, every large electric consumer said their rate was too high and the biggest factor in considering growing or expanding here in Galion.

Interestingly enough, very few of those interviewed had anything negative to say about anything else in the community. In fact, most felt that Galion is a good place to live and do business.

I mention the survey because a little known fact is that nearly 90% of new jobs are created by existing businesses, so it is very important that we maintain and grow the businesses that we currently have.

It’s also important to look at the long term effects of the new electric rate structure on the economic health of the entire community, rather than making an impulsive determination that any increase to anyone is a negative thing.

We have to have a vision and we need to think out of the box if we are going continue to grow and prosper as a community. We need our businesses, industries and our citizens working together to make a strong community.

My hat goes off to the current city council for addressing this very difficult issue which should have been dealt with a long time ago.

TRUISM – Communities rise and fall based on the success of businesses & commerce!


Kleinknecht is the President/CEO of Galion-Crestline Area Chamber of Commerce

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