Wholesale Power Charges and Inflation Drive Up Electric Costs

Rate adjustments will keep power flowing safely and reliably in Starkville

The average residential monthly bill for Starkville Utilities’ electric service will increase $5.56 starting this fall.

The increase results from a recently announced wholesale base rate adjustment by Tennessee Valley Authority, which equates to 2.9%; and a proposed 2.5% rate adjustment by Starkville Utilities—the first local rate increase for electric service in 14 years.

The increase is based on an average residential monthly bill of $102.97 that will rise to $108.53 when rate adjustments go into effect.

The main factor in Starkville Utilities’ rising costs is inflation, which has driven up prices for poles, transformers, lines, fuel and other everyday needs. For the past three years, rising expenses have been offset by TVA pandemic power credits that end this month.

Even with the proposed adjustment, Starkville Utilities’ electric rates are among the lowest in Mississippi when compared to similarly sized municipalities and surrounding cooperatives. The last local electric rate increase went into effect in 2009.

“We are seeing rising costs all around us, from groceries and gas to basic household necessities,” said Edward Kemp, general manager of Starkville Utilities. “The same goes for materials and services we rely on to maintain Starkville’s electric system. We are holding the line on rising costs as best we can, but moving forward, a rate adjustment is necessary to keep power flowing safely and reliably to customers.”

The bulk of Starkville Utilities’ adjustment, 1.5%, will cover the loss of TVA’s pandemic relief and recovery program that provided $650 million in wholesale power cost credits to 153 local power companies. The remaining 1% will pay for increased operating and maintenance costs.

Over the three-year period since the pandemic, Starkville Utilities benefited from $1.4 Million in TVA credits that helped fund operating expenses and service improvements and allowed continuation of investment in the capital improvement plan.

TVA representatives met with the Starkville Board of Alderman on Sept. 15 to discuss the wholesale base rate adjustment.

In addition to addressing day-to-day service needs, Starkville Utilities has been moving forward with infrastructure upgrade projects to improve service reliability for customers throughout Starkville, including preparations for Highway 182/Martin Luther King Jr. Drive corridor revitalization and the completion of the fiber loop connecting all substations.

“The adjustment will help us pay for basic needs and maintain the same level of service, reliability and capital investment,” Kemp said. “Delaying projects or reducing our staffing or workload to save money will only create bigger and costlier problems down the road. The rate adjustment will provide the necessary funds needed to keep Starkville’s electrical system in top condition and address emergent issues when necessary.”

Starkville Utilities is a public utility serving 14,000 residences, businesses and industries in Starkville, Mississippi as well as Mississippi State University. Its mission is to supply safe, reliable, and cost-effective electric and water service of superior quality and value that improves the lives of its customers.

We are a Water and Electric Utilities Company in Starkville