City Unveils Payment Plan for MEAG Debt

Thomaston, currently a decade into a 50-year agreement with Municipal Electric Authority of Georgia, is one of 49 participating communities in the state. Others sharing debt include Barnesville, Forsyth, Griffin, and Newnan.

The city has amassed approximately $9.5 million in a trust account with MEAG which is designated for the debt, according to City Manager Russell Thompson. He said a small annual increase in electric rates per customer would generate enough revenue to grow the trust fund and offset future debt which otherwise will rise exponentially.

“Russell was the first one [of the 49] to put pressure on MEAG to come up with something,” Finance Director Lonnie Joyce said. “[MEAG officials] didn’t want to discuss it. They didn’t want to project out 20 years. They didn’t like that.

“We finally got them to do it,” Joyce continued. “Now everybody else is using this model.”

The “model” calls for a .0015 to .0026 increase per kilowatt hour each year until 2061, which translates to about $1.53 per 1,000 kilowatt hours used monthly. The average household uses 1,000 to 1,500 kilowatt hours per cycle, according to Joyce, which would result in an extra $1.50 to $2.30 on the average monthly bill.

An increase would be applied equally, across the board, to both residential and commercial customers in the city, according to officials. Currently, the city has approximately 4,800 customers.

The model consists of multiple “moving parts,” including changing cost of power and even the addition of a large industry in the city, which could “change the game,” Joyce and Thompson said. Therefore, council members would re-evaluate all components as part of the annual budget process, and increases could fluctuate in either direction.

A certainty is that every year which passes without an increase will compound the long-term responsibility.

“We have to do something - put a little bit back,” Joyce said. “I know it hurts, but we feel like it’s a necessary evil to avoid a [massive] burden years down the road.”

If tendencies toward cleaner fuel continue, the investment could pay dividends. Solar generated power is inefficient, compared to nuclear, which has become increasingly safer.

“If coal and natural gas go away, we may be sitting in the catbird seat,” Joyce stated. “People may be forced to come to us for power. In that case, the whole model would change.”

The model is comparable to the city’s “budget billing” option, which offers customers consistent monthly billing based on the previous year’s usage. During some months, payments will be higher than usage, avoiding much larger payments when usage increases.

According to the model, excess collection would build a surplus until about 2041, allowing customers to avoid a drastic spike beginning in 2042 and continuing until the debt is due in 2061.

The city could exercise an option to sell its interest, according to officials, but Mayor J.D. Stallings said, “You’d be stupid if you did.”

“You’d lose control [if you sell],” Joyce added. “In my opinion, you’d be putting your citizens in a pretty bad spot. If you sell, you’re out of the game.”

Joyce said Thomaston’s electric rates are consistently among the lower portion of the state average.

“We get blasted a lot on social media. You’re going to get blasted no matter what,” Joyce stated. “But I want people to understand, a lot of thought goes into it… We try to do the best we can. I want people to know there’s something behind [our process and recommendations].”

The city will move all excess funds collected to MEAG at the end of each year, according to the presentation.

•MEAG, created by the Georgia General Assembly in 1975, has $12 billion in assets and owns portions of nuclear, hydro, natural gas, coal, and solar facilities.

•Plant Vogtle units one and two were opened in the late 1980s and will be phased out as units three and four, set to open in 2023, are brought online. The nuclear plant, located near Augusta, is owned by Georgia Power (45.7 percent), Oglethorpe Power (30 percent), MEAG (22.7 percent), and Dalton Power (1.6 percent).

•Thomaston derives 59.2 percent of its power from nuclear, 14 percent from gas, 10.6 percent from hydro, 10.4 percent from coal, and purchases 5.9 percent. Almost 70 percent of Thomaston’s power is emission free, with about 30 percent from fossil fuel.