Cleveland Public Power seeks higher rates to build ‘new and better CPP’

Cleveland Public Power plans to raise rates, connect to Cleveland-Hopkins International Airport and improve reliability as it tries to modernize the 120-year-old city-owned electric utility. 

Officials from Mayor Justin Bibb’s administration outlined their road map for bolstering electric service at a Cleveland City Council committee meeting Thursday. The long-awaited presentation came after a summer of power outages that frustrated residents in CPP’s 74,000-customer service area. 

Currently, CPP is caught up in reacting to the crisis of the day, city Chief Operating Officer Martin Keane said. The utility’s strategic plan calls for better communication with customers and a proactive stance for making service more reliable. 

The utility needs more money to cover higher costs and infrastructure work, officials said. CPP is asking council to restructure and raise customers’ electric rates. 

CPP customers: Follow this link to see how your monthly bill would change.

With more revenue, CPP can borrow $30 million in 2028 for infrastructure upgrades. City officials have previously said the system is contending with a history of deferred maintenance and needs more than $250 million in upgrades. 

“We all know that we want a new and better CPP,” Keane said. Later he added, “Without putting us on a healthy financial path by way of rates, very little additional can happen.”

But council members pushed for more details. Ward 12 Council Member Tanmay Shah said he wants CPP to expand to more customers — but that the city needs a timeline for improvements.

“For us, it is impossible to approve additional rates without understanding where those resources are going to be going,” Shah said, adding, “I actually want the city to devote more of its resources towards this.” 

CPP’s presentation noted several major projects in the strategic plan. The list includes rebuilding substations and generating more power locally with renewable energy. The utility also plans technology upgrades to better pinpoint which customers are affected by power outages. 

There was little discussion about connecting the airport to CPP, but the move would represent a coup for the public utility. For now, the city-owned Cleveland-Hopkins is outside CPP’s service area. It buys power from investor-owned competitor FirstEnergy for about $4.8 million per year. 

CPP asks for higher rates to tackle rising costs

The city runs CPP essentially as a nonprofit business, known in budgetary lingo as an enterprise fund. The utility needs to raise enough revenue from customers to pay for workers, materials and the cost of buying electricity from the national grid. Those costs are going up, officials said Thursday. 

CPP is proposing a new rate structure that would charge customers more money per kilowatt hour if they use more power. The utility would also begin levying a fixed charge per billing period that increases over the next three years. 

If council approves the rate hikes, CPP would bring in $6 million more in revenue next year, $7 million more in 2028 and $5 million more in 2029. 

Ward 7 Council Member Austin Davis asked why CPP planned to borrow only $30 million in 2028. Why was CPP not proposing even higher rates to support a bigger infrastructure investment? 

Keane responded that he wished CPP could, but that the utility also needs to retain ratepayers. 

“We have to pick a number that is manageable in a competitive environment as to not shock our customers,” he said. 

“Customers are already shocked by having massive power outages and they are crying out for improvements to their service,” Davis replied.