North St. Paul staff proposes summer cap on electric power adjustment to blunt summer bill spikes

City finance staff proposed a pilot program to cap the electric power-adjustment — the fuel-clause component that spikes bills in summer — at 4¢ for the high-consumption months as a way to reduce summertime bill shock for residents.

Finance Director Dan Wieck presented a model based on 2025 consumption that shows the cap would lower residential revenue by about $171,000 and commercial revenue by about $106,000, for a combined reduction near $277,000. “If we cap this at 4¢ for the summer months, it would result in a loss of revenue of about $277,000 based upon 2025 consumption,” Wieck said, noting staff believes the electric fund can absorb that amount this year as a one-year pilot.

Wieck described the mechanics: the power adjustment is added on top of the base summer rate (which already rises for summer consumption), and in recent years the adjustment has pushed some customers’ bills significantly higher during hot months. The pilot would apply to June consumption and appear on bills mailed in July if council places the item on the consent agenda and approves it.

Council members asked about rate-history context and whether the pilot would affect next year’s rates. Wieck said recent rate actions were taken in earlier years and that, under current projections with the pilot, the city does not plan to raise electric rates in 2027. “There will be no rate increase in 2027 on the electric side,” Wieck told the council.

Staff characterized the request as a measured “dip-a-toe-in” pilot: the council will review actual summer results before deciding whether to expand or alter the approach for future rate-setting. The item is scheduled to return on the consent agenda for council action in June.