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City Manager recommends electric rate study; staff flag potential 1-cent per kWh increase
Summary
Electric utility staff told council their fund balance is low and several CIP projects are underfunded; the City Manager recommended a rate study and said a 1-cent per kWh increase could be implemented in December if the study supports it. Mayor Pro tem Nick Fritz favored raising electric rates over taxes.
Shane Lewis presented the electric utilities budget during the April 27 workshop, noting several capital improvement projects in the CIP are unfunded or underfunded and that the utility’s fund balance is lower because rates have not been increased since 2009 and were reduced twice in recent years. Lewis said all utilities should undergo a rate study to align revenues with needs.
City Manager Jon Rorie recommended a possible 1-cent per kilowatt-hour increase, to be implemented in December if confirmed by the rate study. Mayor Pro tem Nick Fritz commented that the city might obtain more return by raising electric rates instead of increasing taxes.
Why it matters: utility rate changes affect monthly bills for electric customers and the City’s ability to fund utility capital needs. Staff recommended the formal rate study and a December implementation only if justified by the study.
Attribution: Shane Lewis reviewed utility finances in staff materials and Jon Rorie recommended a rate study and possible 1-cent kWh increase; Mayor Pro tem Nick Fritz expressed a preference for rate changes over tax increases.
