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Power board backs five‑year, revenue‑neutral rate design and sends package to city council
Summary
The board recommended a five‑year rate design exhibit to city council that shifts revenue from power rates into base/distribution charges to maintain revenue neutrality; staff said a typical residential bill would rise from about $108 to $120 over five years under the plan. The board approved forwarding the package despite two minor data gaps noted for solar credits.
The Hurricane City Power Board voted to forward a five‑year rate design, based on a recent cost‑of‑service study, to the City Council for approval.
Presenter (S4) told members the guiding objective is revenue neutrality: the proposal raises distribution/base charges modestly while reducing power rates so total utility revenues meet the cost of service. Presenter (S4) said the current cost of service to operate is $18,701,193 and projected revenues are $18,807,988 under the exhibit.
Key changes and customer impacts: Presenter (S4) explained the residential base charge would increase by 50¢ per month in year one (from a $20 base), then step up about 50¢ annually across the five‑year plan. "Over 5 years, your bill is estimated to go from a $108 to a $120 by year 5," Presenter (S4) said using the sample residential profile, assuming identical usage. Agricultural and yard‑lighting rate classes were flagged for larger increases; small commercial will see a modest monthly base rise while large commercial demand charges adjust to better match cost of service.
Presenter (S4) also described how the PCA (purchased cost adjustment) will work on a 12‑month rolling average to smooth seasonal spikes; board members said they favored the 12‑month approach to avoid sharp short‑term changes. Committee members asked whether the municipality could shift more of the burden from commercial to residential; staff said municipal practice typically protects residents from larger swings and that the magnitude of commercial revenue makes large redistributions impractical without significant rate changes.
Unresolved items noted: Staff member (S2) identified two small gaps in the exhibit: the 4¢ solar generation credit for single‑phase residential solar was not included in the rate design PDF, and there was no three‑phase solar data because no customers currently have that configuration. Staff said the omissions are minor, that Jillian has been notified and staff expects to have clarification before the council presentation or to amend the exhibit if council approval requires it.
Motion and next steps: Committee member (S8) moved and Committee member (S6) seconded forwarding the rate design exhibit and resolution to the City Council; the board approved the recommendation by voice vote. Presenter (S4) is slated to present high‑level material at council and Jillian (staff) will attend to address details. Staff said another cost‑of‑service update is anticipated in three years to refine projections.
Attribution note: All direct quotes are attributed to speakers appearing in the meeting transcript and mapped to the speaker whitelist included with this article.
