News Release

For Immediate Release                                                                     

Contact:  Jim Cooper, Key Accounts & Marketing Mgr., Traverse City Light & Power

               Phone: (231) 932-4560 or E-mail: jcooper@tclp.org

Contact:  Phil Callighan, Sr. Account Executive, Knorr Marketing

   Phone: (231) 947-9707, ext. 207; Mobile: (231) 342-7590

               or E-mail: philc@knorrmarketing.com

L&P Announces 2.5% Overall Rate Increase

(Traverse City, Michigan) — The Traverse City Light & Power Board of Directors passed an overall 2.5% rate increase for customers to take effect October 1 of this year, as proposed by a consultant they had hired to evaluate the utility’s revenue requirements through 2011. The decision was made at the conclusion of a public hearing held to discuss the proposal at last (Tuesday) evening’s regular meeting of the L&P Board.

This is the first rate increase the Traverse City Light & Power board has instituted since 1985. In 2004, rates were adjusted to reflect the true cost of service to different classes of customers.

            In Traverse City, the average residential customer, using 515 kW of electricity each month, would see their bill increase approximately $1.15 (including tax) per month.

            “According to our consultant, it was essential that we increase rates in order to have sufficient cash reserves to replace and protect our aging assets,” said Linda Johnson, Chairman of the Light and Power Board. “The board concluded that we needed to increase our reserve to handle timely replacement of our power lines and transmission assets, just as any homeowner needs money on hand for roof replacement or other major household improvements. And when you compare Light and Power’s rates to other utility rates, electricity is still a bargain in Traverse City.”

Mark Beauchamp, a consultant from Utility Financial Solutions in Holland,

Michigan, had recommended the L&P board increase overall rates by 2.5% as part of a

rate track he proposed to accommodate the uncertainty in power supply costs

and increase the utility’s cash reserves.

Traverse City Light & Power (www.tclp.org) is a community-owned, community- focused municipal utility that offers energy at low rates in the region to over 10,000 customers in Traverse City, and parts of Blair, East Bay, Elmwood, Garfield, Peninsula and Paradise townships. 

###