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Salem staff presents two options for electric-rate changes in first readings
Summary
City staff summarized a UFS rate study and presented two options for a set of ordinances: keep current rates and add a regular review for demand meters, or adopt a three‑year plan that adds service‑availability fees and shifts costs between residential, commercial and demand customers.
City staff told the Salem City Council during first readings that a recent rate study by UFS recommends changes to how electric service costs are allocated among residential, commercial and large (demand) customers. The council received two options: retain current rates and adopt a bill to set a 12‑month review interval for demand‑meter thresholds, or adopt the three‑year UFS proposal that would add service‑availability fees for each customer class, reduce residential and demand rates modestly and increase commercial rates annually.
Staff said the UFS analysis showed residential customers were effectively subsidizing commercial customers under the current structure. Under the consultant’s recommended scenario, average residential bills would drop slightly after three years, commercial bills would increase (staff estimated roughly $6 per month for a typical commercial account), and demand customers would see a decrease (staff estimated about $14 per month). The study used the utility’s measured ‘‘average household’’ usage to model impacts.
Council members asked for more detail about the service‑availability fee, including whether the fee would be dedicated to a particular reserve or infrastructure purpose; staff said the fee’s principal rationale is to recover fixed costs associated with providing service capacity (larger lines, transformers and meter infrastructure) and to help rebuild reserve funds. Staff also noted the utility committee lacked a quorum at its recent meeting and therefore did not provide a formal recommendation.
These ordinances (bills 36‑73 through 36‑77) were presented as first reads; no final council action was taken on the rate options at this meeting. Staff told the council they will return with the full schedule and recommended language for final consideration and a vote at a subsequent meeting.
