Power board recommends updated impact fees to City Council

The Hurricane City Power Board voted to recommend that the City Council approve an updated electric impact fee schedule at its meeting on March 30, 2025. Board members asked staff to confirm two line-item figures before the council vote and discussed how the fee change would interact with the city—s upcoming cost-of-service study and capital plan.

The recommendation followed a presentation of an updated impact-fee analysis by the consultant team and a staff briefing on key assumptions, timing and the projected capital needs the fees are intended to cover. Board members were told the proposed schedule would bring some single-service impact fees from roughly $5,100 to about $12,300 in some categories and that the city has not updated fees since 2018.

Board members said the proposed fees reflect higher construction and equipment costs and a shift toward larger residential service sizes (more 400-amp services), which increases the per-connection infrastructure cost. Staff said the impact fees are intended to ensure new growth pays for the distribution, substation and transmission upgrades required to serve it rather than shifting all of those costs onto existing ratepayers.

Staff described outstanding questions in the consultant—s spreadsheet: two service-size entries showed a different percentage increase than the rest of the schedule. Staff asked the board to authorize recommending the schedule to council while resolving those values. The board approved a motion to recommend approval to council and to confirm the two discrepant numbers before the council meeting.

Action and timing: board members discussed that, if the council approves the new fees, state-mandated notice and administrative procedures would require an additional waiting/advertising period before the fees take effect (staff noted a 90-day post-adoption advertising window was typical). Staff said the new schedule would be submitted to the utility's ongoing electric cost-of-service study so the approved impact fees can be reflected in base-rate and rate-design work.

Board members also discussed financing and implementation. Several members noted the capital plan in the consultant analysis front-loads substantial work in the next four years and observed that impact-fee collections alone would be unlikely to fund all near-term needs; they discussed options such as bonding against future revenue or phasing projects to match revenue timing. Staff said impact fees can be used to retire bond debt if bonds are issued to accelerate construction.

Votes at the meeting: a motion to recommend council approval was made, seconded and adopted by voice vote; no roll-call opposition was recorded in the meeting transcript. Staff noted they would confirm the two discrepant spreadsheet lines with the consultant (ICPE/ICP) and LRB before forwarding final materials to council for the meeting the following night.

Board speakers and roles referenced comments during the discussion, and staff said they would provide corrected figures and supporting detail to the board and council prior to the council vote.

Looking ahead: staff asked the board to consider the interaction between the new impact fees and the utility—s cost-of-service study with Utility Financial Solutions (UFS); results of the rate study will determine whether base rates must change to cover any gap between capital needs and impact-fee revenue.

The board did not adopt the fee schedule itself; it recommended that the City Council approve the proposed schedule at the council meeting scheduled for the next day. Staff said the effective date would follow the statutory/administrative publication period if council approves the proposal.