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    Editorials
    Friday, May 10, 2024

    Keep NPU at 10%

    If they did not know it before, they know it now. City taxpayers have a great deal when it comes to money flowing from Norwich Public Utilities into the city's general fund.

    Norwich Public Utilities provides natural gas, water, sewer and electric service to homes and businesses in Norwich. The charter has had a long-standing requirement that 10 percent of gross revenues from the utility flow back to the general fund, helping pay for services and hold down taxes.

    NPU General Manager John Bilda, addressing the Charter Revision Commission Thursday, presented information showing that the national median average for municipal utilities is to send 5.5 percent of operating revenues to the local government. Mr. Bilda was describing the ways the charter regulates the municipal utility.

    According to the information, the 10 percent requirement for NPU is the highest in the Northeast. However, the Norwich utility has learned to operate within that constraint, said Mr. Bilda.

    NPU is well staffed. It has the resources to maintain the electric grid in the city and get power back on fast when there are problems. Its prices are competitive with private utilities. NPU enjoys enjoys a monopoly within its service area.

    One reason NPU is such an asset to Norwich is that it provides an additional revenue stream for this urban community. Cutting that revenue stream would reduce its value to the city. We urge the charter commission to maintain the 10 percent.

    On another issue, however, Mr. Bilda is seeking some relief for the public utility. When it comes to bonding to pay for projects, NPU is held by the same standard as all of city government. Voter approval at a referendum is required if the borrowing for a project is to exceed $800,000. That's a low threshold for a utility, which must constantly invest in infrastructure.

    Mr. Bilda submitted a recommendation that would exempt NPU from the referendum requirement since the bonds are to be paid for with revenues from the utility.

    While allowing NPU to borrow any amount without voter approval would be excessive, creating a substantially higher threshold for NPU, before requiring a referendum, appears reasonable.

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