TCLP Approves Rate Hike, Local Awards; Launches New Energy Assistance Program

Traverse City Light & Power (TCLP) board members voted Tuesday to approve a 5 percent rate hike for customers starting October 1. The city-owned utility will launch a new energy assistance program that same date. Board members Tuesday also approved several local funding awards and discussed planned support for energy-efficient HVAC equipment at Central Grade School, with school district trustees set to vote Monday on approving that alternate system.

Board members held a required public hearing before approving a planned rate hike Tuesday. TCLP Chief Financial Officer Karla Myers-Beman said the 5 percent increase is necessary to maintain reliability, invest in grid modernization, and keep up with increasing costs. It’s the fourth rate hike since 2020, with 2.5 percent increases implemented in 2021 and 2022, no rate increase in 2023, a 5 percent increase in 2024, and no increase last year. However, TCLP made other changes last year, notably shifting to a dynamic pricing model called time-of-use.

According to staff estimates, low-consumption residential customers will pay about $3.74 per month more under the increase. Myers-Beman said that category represents 69 percent of TCLP’s residential customers. Mid-consumption households would pay $5.60 more per month, while high-consumption homes would pay $10.10 more per month. Commercial customers would see an average increase just under $13, while industrial customers – whose bills often range between $10,000 and $20,000 – would see an expected change of just over $728 monthly.

Several residents spoke during public comment expressing concern about rising expenses. Board member John Taylor said he understood those concerns and took them seriously. However, the energy industry is also facing “fairly unprecedented cost pressures,” he said. “If we don’t do this rate increase, it’s going to come back at a higher level in the future.” Taylor said he’d rather spread increases out gradually than suddenly hit customers with a large hike all at once, which he believed would be a more “upsetting” scenario.

Myers-Beman said the U.S. Department of Energy considers a household to have a high energy burden when more than 6 percent of income is spent on energy costs. In the TCLP service territory, the current average is 1-3 percent, she noted. However, for customers struggling with electric and heating costs, TCLP is rolling out a new energy assistance program in partnership with The Salvation Army.

Under the program, Low-Income Energy Assistance Fund (LIEAF) funds collected from TCLP customers “will support TCLP’s locally administered assistance program rather than being remitted for distribution through the statewide program,” according to the utility. “This approach will allow funds contributed by TCLP customers to directly support eligible households served by TCLP.”

Customers can obtain an application through TCLP, which will then be referred to The Salvation Army to determine eligibility and coordinate assistance with TCLP. To qualify, applicants must meet current state income guidelines, be Michigan residents, and have an active TCLP electric account in their name. “Assistance is not guaranteed and will depend on eligibility, available funding, and agency capacity,” according to TLCP. Applications will open on October 1; details are available online here.

TCLP board members Tuesday also approved several funding awards from the utility’s Community Investment Fund (CIF). The largest was $40,000 for Habitat for Humanity to install a solar energy system at its ReStore facility. Another $16,500 was approved for Preserve Hickory for lighting system upgrades at Hickory Hills Ski Area. A final allocation of $12,500 will go toward tree planting work in the Historic Arboretum at The Village of Grand Traverse Commons through the Friends of the Historic Commons.

TCLP is also planning to give Traverse City Area Public Schools (TCAPS) $125,000 through its Energy Rewards program for a hybrid energy-efficient HVAC system at Central Grade School. TCAPS additionally applied for CIF funding, but the committee that reviews the CIF applications did not recommend an additional allocation since the Energy Rewards allocation will already be “significant.”  

TCAPS board members are set to vote Monday on approving the alternate HVAC system, which has been championed by community members eager to see a more sustainable energy solution installed at Central Grade as part of its reconstruction. According to a memo from Superintendent Dr. John VanWagoner, 67 percent of the fundraising goal for the system – or $379,529 of $568,069 – has been raised in pledges and donations. That includes the $125,000 TCLP rebate, a $10,000 grant from Rotary Charities, and $244,529 from community members and foundations.

Community members are continuing to fundraise, and TCAPS could still secure additional grants, VanWagoner wrote to trustees. Therefore, “given the potential for equipment price increases, the significant fundraising progress to date, and the strong likelihood of additional funding commitments,” the superintendent is recommending purchasing the system. He said the district will be able to analyze baseline data during the first few years of operation to measure the energy savings from the system and could choose to allocate a percentage of savings “to support future district-wide sustainability efforts.”