Cleveland Public Power proposes steep rate hikes

Cleveland Public Power asked the city's utilities committee on Thursday for permission to raise electric rates to fund a $30 million grid improvement project in 2028. Director of Public Utilities Martin Keane presented the proposal to council members, explaining that the additional revenue would allow the city-owned utility to borrow money and upgrade aging infrastructure. Keane stated that previous rate adjustments in 2025 and 2026 were necessary to meet existing debt obligations, while this new phase is designed to stabilize the system and reduce outages.

The proposal outlines a tiered pricing structure where customers pay less for the first 250 kilowatt hours and more for subsequent blocks of usage. A fixed monthly charge would also be added. Rates vary by season, with summer and winter pricing structures differing. For an average residential customer using approximately 500 kilowatt hours per month, the monthly bill would increase by $1.48 in 2027, $7.58 in 2028, and $13.15 in 2029 compared to 2026 levels. In winter months, those increases would be $1.55, $7.05, and $11.93 respectively.

Council members expressed concern that the presentation lacked specific details on how the borrowed funds would be spent. Tanmay Shah, a city council member, argued that approving higher rates without a clear plan for resource allocation was imprudent. "It is impossible to approve additional rates without understanding where those resources are going to be going," Shah said. He and other members noted that the utility has not yet specified which equipment requires replacement or how tree trimming practices will change to prevent future power failures.

Keane told the committee that more detailed information regarding the 2028 spending plan would be provided before the borrowing occurs. He attributed the need for higher rates to rising costs for salaries, healthcare, and physical grid components such as utility poles and wire. The utility serves roughly 75,000 customers in Cleveland, offering an alternative to FirstEnergy's Illuminating Company. According to the city's budget book, CPP reported 839 minor power outages in 2025, up from 630 in 2024 and 403 in 2023.

Councilmember Austin Davis questioned why the proposed investment was capped at $30 million, suggesting a $50 million figure might be more effective. Keane explained that a larger investment would require even higher rates. Davis countered that residents already incur hidden costs from outages, such as spoiled food. Committee Chair Brian Kazy said the rates legislation will be reviewed at two additional meetings in the coming weeks. When asked if CPP could pay its bills without a rate increase, Keane answered that it could, but described the 2027 budget as very lean.

The utility has not yet released its final 2026 outage numbers. The proposed rate structure aims to align customer costs with the utility's operational expenses. Council members will continue to evaluate the financial impact and the specific grid upgrades before making a final decision on the borrowing authority.