Spring City opens public hearing on proposed power-rate formula and budget; staged increases proposed

Spring City Council opened a public hearing on a proposed power‑rate formula and the city’s operating budget, focusing on draft Resolution 2025‑04 that would authorize monthly power cost adjustments and modest, staged rate increases beginning July 1.

The proposal, developed with consultant Utility Financial Solutions, would use a rolling average of wholesale power costs and empower staff — with council and mayor oversight — to make monthly power cost adjustments so the city does not repeatedly operate “underwater,” city staff said. Under the plan discussed, the base service charge would rise by $1 for in‑city customers and $2 for out‑of‑city customers starting July; the energy charge would increase by about a quarter of a penny per kilowatt‑hour for the first year, with similar small increases proposed for the following two years to recoup prior losses gradually.

Why it matters: Council members and residents said volatile wholesale prices during and after the COVID‑era — including a period when the city’s association paid about 19–20¢ per kilowatt‑hour on the open market while the city’s retail rate remained roughly 7.5¢ — forced the city to draw down reserves by nearly $400,000 over three years. The formula would create an ongoing mechanism to track costs monthly and adjust retail charges more promptly, with a stated goal of recovering losses slowly rather than imposing a single large increase.

Council discussion and consultant work Council member Ken Crowe said the city contracted Utility Financial Solutions in August 2024 and that project manager Chris Lund has been working with staff. “The cost went up very high during the COVID years all the way through almost the end of 2022,” Crowe said. He described a model widely used in the region: input monthly costs into a spreadsheet, compute a rolling average (with about two months of lag), and allow staff to make adjustments so the city avoids repeating a multi‑year deficit. Crowe said the council had already used a power cost adjustment (PCA) mechanism approved in December and that Resolution 2025‑04 would formalize a three‑year schedule with staff oversight by a council member and the mayor.

Crowe described the city’s three‑year loss as “nearly $400,000” and said recent adjustments have reduced that gap to about $340,000, with roughly $60,000 recouped so far. He also noted nonenergy operating costs have risen — “transformers have tripled,” he said — contributing to upward pressure on rates.

Resident comments and demand‑response idea A resident identified as a Spring City resident told the council the proposal was positive and asked whether the city could implement a demand‑response or advance‑notice program used in larger cities — telling customers in advance to reduce appliance use during critical hours — to avoid spikes. The resident said such programs helped when they lived in a larger city and asked whether a similar approach could be used locally.

Council members and staff responded that Spring City’s usage patterns differ from larger, more commercial cities (local peaks were described as evening hours when commuters return from the Salt Lake area), and that to date the city had not needed a demand‑response program. Crowe added that the association the city buys power through had “worked through” earlier contract problems and that the rolling‑average/PCA mechanism would allow rates to come back down as market prices fall, rather than remain permanently elevated after a spike.

Budget context Council member Courtney Chen introduced the broader budget discussion and invited Dave Hoffman, described in the meeting as the city’s finance expert, to answer questions. Staff said the general fund requires a balanced budget and that the operating budget contained a small, planned deficit to address specific issues, which staff expected to resolve by the start of the new fiscal year. Staff noted the draft budget is effective July 1 and that the numbers shown included 2024 actuals and the 2025 revised forecast.

Next steps and procedural action Council members opened the floor for public comment on both the proposed power‑rate formula and the draft budget. After public comments concluded, council members moved to adjourn the public hearing. The council recorded a motion to adjourn the hearing on the power‑rate and budget items and voted in favor; the council stated that actual adoption of the rate formula would be taken up in the regular meeting.

Copies of draft Resolution 2025‑04, the Utility Financial Solutions engagement, and the consultant’s PCA methodology were discussed during the hearing; council members said staff would continue monthly oversight if the resolution is adopted.

Ending The public hearing was adjourned and the council will consider final adoption of the proposed power‑rate formula and the operating budget at its regular meeting.