Georgetown Electric Utility proposes 2% rate increase to fund $260M capital plan

Georgetown's Electric Utility is proposing a 2% rate increase for fiscal year 2026, driven by the need to fund a substantial $260 million capital investment over the next five years. This increase aims to support anticipated load growth, which is expected to nearly double by 2030, and to ensure the utility meets critical financial metrics on a standalone basis.

During a recent government meeting, Michael Simpson, a portfolio analyst with the utility, outlined the financial forecast that led to this recommendation. He emphasized the importance of maintaining strong financial metrics to secure favorable interest rates from rating agencies, which currently assess the electric and water utilities together. The proposed rate increase is essential for generating sufficient revenue to cover operational costs and debt service.

Scott Burnham from NewGen Strategies, who conducted a cost of service and rate design study, explained the methodology behind the proposed changes. He noted that the utility's total revenue requirement for the upcoming test year is approximately $135.7 million, while current rates are projected to generate only about $133.3 million, resulting in a revenue deficiency of $2.5 million.

The proposed adjustments will see base rates increase by about 2.1%, translating to an average system revenue increase of 1.8%. For residential customers, this means monthly bill impacts ranging from $1.50 to $3.50, depending on usage levels. The adjustments are designed to align rates more closely with the actual cost of service while also considering policy goals.

As Georgetown prepares for significant growth, the proposed rate increase is a critical step in ensuring the electric utility can meet future demands while maintaining financial stability. The council will continue to review these recommendations as they move forward.