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Richland approves 8.5% electric retail rate increase to protect utility reserves
Summary
Council approved Ordinance 2025‑39 to raise electric retail rates by roughly 8.5% effective Jan. 1, 2026, after a consultant and staff said BPA wholesale and transmission cost increases and capital needs would otherwise deplete reserves.
The Richland City Council voted Dec. 2 to approve an 8.5% retail electric rate increase effective Jan. 1, 2026, after staff and consultant presentations showed rising Bonneville Power Administration costs and projected capital needs would otherwise erode utility reserves.
Clint Whitney and consultant Angie Sanchez (FCS) presented an updated rate study showing BPA wholesale power up about 8.9% and transmission costs up about 19.9% as of October 2025; staff said wholesale power costs represent roughly 60% of the utility’s expenses. The study reviewed operating needs, projected O&M expenses, debt service and capital projects and concluded an 8.5% increase for 2026 would preserve a target operating reserve (about 120 days of O&M) and allow planned capital spending including an anticipated $7.5 million revenue bond for CIP needs.
Sanchez gave a residential example of the proposal: a daily fixed charge rising from $0.69 to $0.75 and an energy charge increase of about $0.01 per kilowatt‑hour under the 8.5% scenario. Staff said there would be no change to rate structure at this time; a broader rate‑design study is planned for 2026.
Council members acknowledged the increase’s size but framed it as catching up after holding rates since 2019. Several members asked technical questions about timing and BPA surcharges; staff said the change is intended to address near‑term cost pressure and preserve the utility’s capacity to issue bonds, maintain debt‑service coverage and fund renewals-and‑replacements.
Council approved the ordinance on a roll‑call vote. Staff said the ordinance represents a first‑reading action here and that final adoption and implementation would follow the city’s ordinance schedule and notification requirements.
