Council adopts change to electric base rate, moving from 6.74¢ to 7¢ per kWh; takes effect Sept. 1

The Coldwater City Council voted to adopt Resolution 25-68 to adjust the electric department’s base energy charge from 6.74 cents to 7.00 cents per kilowatt-hour, effective Sept. 1. Staff said the change is intended to reduce volatility in the power-cost-adjustment (PCA) portion of bills and to make costs more predictable for customers.

Paul, City staff, explained that the PCA is a monthly variable pass-through that reflects the city’s wholesale energy cost; raising the fixed base reduces the portion recovered through the PCA when wholesale prices spike. “What we're suggesting or recommending is move the base cost up to 7¢, which will lessen that amount of the variable cost,” Paul said. He showed a chart comparing the current base, the PCA spikes and the proposed adjustment and said customers would see a lower PCA charge compared with the previous method.

Staff told council the change was based on a 2023 cost-of-service study and that no overall rate increase for fiscal year 2025–26 was being recommended; the base-bill adjustment is intended to stabilize monthly bills. Staff estimated a roughly 4% increase in base rate charges for a typical residential customer but said the PCA reduction would offset much of that increase in many months.

Council adopted Resolution 25-68 by voice vote. Staff said the adjustment will take effect Sept. 1 to avoid applying the change during peak summer billing months.