Tahlequah Daily Press

February 18, 2013

HPWA mulls rate hike for gas customers

Staff Writer

HULBERT — Gas customers in Hulbert may soon see an increase in their service cost.

A savings transfer of $120, 000 was approved during the regular board of trustees monthly meeting on Thursday to correct the debt service ratio held with the investment banking and wealth management firm WellsNelson & Associates LLC. Gas sales revenue losses since 2010 have brought the city’s debt covenant below the needed 11.25 percent, said Lloyd McClendon, representing the Tulsa Wells Nelson & Associates office. Hulbert’s current debt ratio is 11.08.

“The bottom line is [Hulbert’s] revenue is dropping,” he said. “It looks to me like your revenue is not being generated like it was in 2010.”

According to a billing report provided by McClendon, Hulbert earned $1,667,840.42 in gas revenue in 2010, while in 2011, gas sales produced $1,414,263.73 in revenue. The 2012 report indicated a gas earning of $1,209, 660.94.

“In 2012 [Hulbert] hit a snag. The revenue just went to pot,” said McClendon.

Gas sale profits have been hampered by milder winter temperatures, a project connected to State Highway 51 and miscalculated gas price adjustments, said Hulbert Trustee George Truitt.

“We’ve had some unusual debt that’s hit us pretty hard,” he said. “We’ve tried to give customers a more equitable rate, but it’s costing the city.”

Rates were restructured in September 2010, but the long-term effects were realized for a full year. Hulbert will be using the numbers generated from the 2011-2012 fiscal year to review its rate schedule. Discussion suggested that “high-end users” may be getting a break on price for gas service.

“We’ve got a [billing cycle generated over a] year and a half now to be able  compare the numbers,” said Hulbert Public Works Authority billing clerk Kim McDaniel. “We went two steps when we just needed to go one.”

A special meeting is expected to be held soon to review the billing information and consider readjusting gas rates. The time and date of that meeting has not yet been set, as the city is  gathering more figures and information to consider before enacting a decision.

The board also discussed the need to establish a more concrete utilities “cut-off policy” relating to late-payment agreements. Currently, customers have been allowed to conduct the process over the phone, but the need to complete office visits and sign promissory notes are in order to alleviate bill confusion and conflict.