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Commission adopts internal electric billing of "cost plus a penny" to align utility budgets
Summary
City Manager Gary Whitehead told the commission the city will charge its departments internal electric usage at cost plus one cent per kilowatt-hour to remove internal budget distortions and better reflect actual utility costs; the commission approved the change unanimously.
City Manager Gary Whitehead said the city currently meters more than 105 internal meters and had been charging internal departments the full retail rate, which inflated internal utility budgets. To correct the accounting imbalance, staff proposed charging departmental meters the actual purchase cost plus one cent per kilowatt-hour so the electric fund can recover distribution and maintenance costs without creating phantom revenue.
Whitehead said the wholesale-related cost is about 9¢ per kilowatt-hour and that the penny markup will help the electric fund cover infrastructure while the budget is cleaned up. He described the change as a bookkeeping and budget-alignment step rather than new revenue to the general fund.
A commissioner moved to approve the cost-based internal electric billing method; the motion passed unanimously on the record.
Staff said more detailed rate proposals for water, wastewater and trash may follow as the budget is finalized.
