CLARKSDALE – On a normal morning, Clarksdale native Annie Houston wakes up around 5:30 a.m., makes her coffee and reads her Bible for about an hour, takes a shower, gets dressed, drops her grandson off to school and heads to work. After her eight-hour shift, she makes sure her grandson is in from school, changes clothes, takes a walk, watches television, and goes to bed before waking up to do it all over again.
Houston says this has been her routine for the past four years living on Cedar Street. So it came as a shock when she received her utility bill in July that was $88 more than her bill in June, which she said was higher than normal. And she was billed for a 35-day cycle, six days more than usual.
“I haven’t done anything differently … I got a window air conditioner, and I [haven’t] been burning that window air conditioner out there on my porch. It’s like certain months the bills just take a big jump,” she said.
“We’re living from paycheck to paycheck and some [people are] just getting one check a month. Something gotta give.”
But Houston is not alone in experiencing utility bill sticker shock.
In fact, all summer Clarksdale residents have been filling the Clarksdale Public Utilities Commission board meetings to complain about higher than normal bills. Officials at CPU, countering the complaints, say the bills are not unusual given the abnormally warm summer. Nonetheless, those bills won’t go down anytime soon.
The public utility plans a rate increase after it completes a study which is being conducted by BKD, LLP in Jackson at a cost of $15,900.
George Fields, another Clarksdale resident and ratepayer, echoed the sentiment of Houston, explaining his issue with what he calls the “unfair” billing cycle. He said there are people who don’t get paid until after their bills are due.
“It’s unfair for some people to get utility bills at end of the month and some of those people don’t have the resources to pay their bill until the first of the month or third of the month,” said Fields.
“But you cut their utilities off the day before they get their resources. First you get a $10 penalty for being late, then you get a $15 penalty for paying on the date of the bill, regardless if your service have been cut off or not, you still gotta pay that $15.”
There are five different billing cycles depending on where a person lives, according to CPU statement policy. Customers pay their bills within a week after their due date or their utilities will be shut off, and they have to pay late fees.
CPU offers multiples services – water, electric, sewer, mosquito, and refuse. But when water meters, which are separate from electric meters, are not read on time, this increases the customers billing cycle, forcing them to pay the extra charges.
Previously, CPU contracted with Baker Engineering, Inc. to hire four people to read electric and water meters. Since that contract expired this year, CPU has hired three of their own employees to read only water meters.
Jim Hemphill, interim general manager and CEO of the Victor Group in Starkville added that reading water meters is extremely difficult, but they are working to fix this problem.
Could the new smart meters be the problem?
Customer complaints swirl around the recent installation of new electric meters, but CPU officials say the new meters improve efficiency and have not caused a price spike.
The utility bought 6,556 Advanced Metering Infrastructure, or AMI smart meters, from Eaton Corporation, a power management company based in Minnesota, for $1.3 million at a July 15, 2017 meeting. The utility company used excess revenue the company saved over the years in order to buy the smart meters, said Hemphill.
Officials say accuracy and efficiency were their primary reasons for purchasing the new meters after vetting them for two years.
Being able to monitor customers real time consumption – daily, hourly, and monthly usage – in the office, can save the customers time by providing them with answers as soon as they walk in – in contrast to waiting one or two days for a “foot soldier” to come out and reread meters, officials added.
The AMI system provides a two-way communication between the ratepayer and the utility company. It allows the smart meter to precisely collect data on the electricity consumption and send it to the utility company for billing and monitoring digitally.
In addition, CPU also purchased MultiSpeak Specification which makes it easier to collect the data and send it to the software billing system the company uses.
Residents have suggested the new electric meters could be why bills are higher, but officials say although the meters are installed, they are currently offline. They are validating the meters and checking to see if the data from the meters are accurately transferred to the billing cycle. Hemphill expects they will flip the switch in approximately 10 to 15 days.
“We’ve had an unusually warm summer with high humidity and it takes a lot of electricity to run air conditioning … and the parents may be at work and the kids may be home and may not be as careful with keeping the temp on the thermostat where it needs to be or they’re keeping doors open,” said Hemphill.
“And that could absolutely run a bill up.”
However, data show temperatures haven’t significantly increased during the summer months in Mississippi.
Compared to last year, June temperatures increased by about 4 degrees. After that, increases were insignificant. In July, it decreased by 0.2 degrees. In August, temperatures inched up only 0.2 degrees, according to data from the National Center for Environmental Information.
“When people come to talk about or discuss the issue, a lot of times [CPU] says, ‘Why don’t you turn your thermostat down?’” said Ray Sykes, a Clarksdale resident and former mayoral candidate at an August 28 CPU meeting.
“Here’s the problem in Clarksdale, when it gets hot, people automatically turn their thermostat down because they don’t want a high bill.”
But, in comparison to the state and national averages, the utility company’s residential rates are lower than both, and they haven’t increased since 2014.
Currently, CPU’s residential rate is 8.92 cents per kilowatt-hour (kWh) whereas Mississippi’s average rate is 12.07 cents per kWh and the U.S. average rate is 13.5 cents, according to data from the U.S. Energy Information Administration.
In 2011, residential rates for CPU was $7.79, and in 2012, it increased to $8.34, according to the 2014 rate study.
What’s in store for the future?
Officials at CPU have not talked about changing the billing cycle, but they did highlight alternative options they provide for customers to pay their bills such as picking their own due date, levelized billing, getting an payment extension and arranging a payment plan.
Out of more than 6,000 customers, only 300 have chosen the “pick a due date” option, said Shelia Profit, senior accountant for the utility company. But these options require additional fees. For a customer who wants to pick their own due date, it’s an initial $10 charge for registration fees.
The Clarksdale community isn’t the only one frustrated with what they say are high bills.
In Jackson, over 20,000 residents have to pay months worth of water bills because they haven’t received those bills in months – costing the city a $20 million loss in revenue, the Clarion Ledger reported.
And in August, community members in Holly Springs, Ark. attended a town hall meeting to address concerns over high bills, a local Memphis news station reported.
As bills have increased this summer, residents are bracing themselves for bigger bills next year.
At a September 11 board meeting, the commission members approved their 2019 budget. The utility projected a $2 million dollar increase in revenue for electric, water, and sewer services. Fuel adjustments rates are being revisited which will also have an effect on revenues. These rates are calculated based on the fluctuations of the natural gas prices that CPU’s energy provider, Cleco Power LLC, charge the utility for the power they purchase.
In turn, this rate is passed on to customers.
Profit, the senior accountant for the utility, said the increase in revenue is predicated on the new rate study which they expect to be completed soon.
In a city where the average yearly income is around $29,000, residents argue they can’t afford to pay extra.
“What’s important to the city is if I look at the income across the city, it’s the small man who has that high bill,” said Sykes. “It’s not that that he don’t want to pay for what he owes, but he can’t pay if it’s excessively high.”