Back in “the day” when William D. Morgan was intendant and then mayor of Georgetown, he led the way for much-needed progress for our small town and county.
Street lights and power, telephones, water and sewer service, oaks lining the streets and the jetties to protect the entrance to Winyah Bay were some of his accomplishments.
Now, a hundred years later, many people are asking: Does the City of Georgetown really need an electric department?
A recent story by reporter Scott Harper shows that the city charges its commercial electric customers some 40 to 50 percent more than Santee Cooper or Santee Electric Cooperative.
That is galling to many because all of the electricity is produced at the Winyah Generating Station outside the city.
Santee Cooper sells its electricity directly to some customers. It’s also the supplier for the electricity that is resold through Santee Electric Co-operative.
Why, many wonder, is it so necessary for the City of Georgetown to have its own, separate department?
In 1921 the city began operating its own electric system. The power plant was on or near what is today City Hall. There wasn’t any other choice back then, so it made plenty of sense for the city to serve its citizens and businesses.
When the city decided to build a new office for itself, it sold the power plant to Santee Cooper and built City Hall on North Fraser Street.
Today, the ArcelorMittal-Georgetown steel mill gets its power directly from Santee Cooper. International Paper produces its own electricity from its onsite power house.
The City of Georgetown paid about $8 million in 2008 for its electricity and sold it for about $12.6 million. There was about $2.5 million in “personal services” — payroll — and $2.6 million in “Other charges and services.”
After adding and subtracting these other revenue and expense items, there was a net operating income of $1.9 million. For the following budget year, City Council voted to transfer $1.4 million to the city’s general fund.
And that’s been a regular practice, charging more for electricity than the city pays, employing people in its own electric department, and then putting excess money — “fund balance” — into the overall city budget.
That’s a convenient way to avoid levying a higher tax on individuals and on businesses.
But is it right?
The practice is somewhat like buying a washing machine for $700 in one store and not going to another store with the same make and model where the washing machine costs $500. Most folks would want to save that $200 difference and spend it where they want, rather than in the higher-priced store.
For businesses in the city, if they just use electric lights and heat, the difference might not be significant.
But for businesses that use electricity for cooking or manufacturing or service work, the differences can be huge.
A former restaurant manager of a recently-closed store said his particular business had one of the highest electric bills of about 100 such restaurants in the state of South Carolina.
The costs don’t just affect the bottom line for the business. They also affect the bottom line for the customer. If your business electric bill is $5,000 a month inside the city, and your competitor in the county pays $3,500, you will have to raise your prices to cover the extra $1,500 cost of doing business. That monthly difference jacks costs up by $18,000 a year.
To give the city its due, it has conducted its own study and is planning to lower its electric rates for businesses, ranging from 1.21 percent to 15.3 percent.
But, many wonder, is that too little, too late?
Is it instead the time to close down the electric department?
Chances are, the folks who work for the city’s electric department could find comparable work for Santee Cooper or Santee Electric Co-op — and taxpayers and ratepayers would save money in the bargain.
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