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Contract engineer: Odessa residential rates are ~20% below cost of service; board weighs 3‑ vs 4‑year plans
Summary
Contract electrical engineer David Brown presented a cost-of-service study showing a roughly 20% gap between residential cost-to-serve and current billed rates and offered multi-year rate options; board members debated a 3‑year faster-recovery plan versus a 4‑year plan that eases immediate impact. Multiple residents urged an audit and refunds for past ECA charges.
David Brown, the city’s contracted electrical engineer, presented a cost-of-service study to the Board of Aldermen that found the all-in cost to provide residential power for the utility is roughly $0.1294 per kilowatt-hour while the effective billed residential rate is about $0.1072 per kilowatt-hour — a gap Brown described as "about a 20% difference." He told the board that upward pressures from the pool purchase (MPUA) wheeling-cost increase and inflation have amplified the shortfall and that the municipality must choose a multi-year path to close the gap.
Brown presented multiple options: an up-front 12% first-step (briefly discussed), a three‑year plan that would recoup needed funds faster, and a four‑year plan (his preferred approach in the presentation) that phases increases more gradually and offers an alternate option that splits small and large commercial classes to reduce burdens on smaller downtown businesses. He recommended the simplified ECA calculation be adopted temporarily while the board finalizes a permanent rate ordinance following a complete cost-of-service package and a system study.
Council members pressed Brown on details. He said the proposed ECA language would not include unbilled kilowatt adjustments and that the three‑month rolling average would be applied as current month plus the two preceding months. He also recommended a system study and a meter/audit to detect anomalies — for example, misconfigured meters or incorrect phase reporting — and said such a study would take roughly four months.
Board members discussed tradeoffs: a three‑year schedule would restore capital-sustaining revenue sooner but impose larger near-term increases on customers; a four‑year plan would soften immediate impact but delay recovery of critical capital funds. Members repeatedly noted the board is now fully staffed and that overdue capital projects remain.
Residents at the meeting demanded clarity and remediation for past bills. Vicky Martinez urged "a full audit...from 2019 on" and asked that any refunds be planned and made transparent. Gretchen Dorman asked staff to inspect her meter and said her first bill after moving in was $608 for utilities.
No final rate ordinance was adopted at the meeting. The board directed staff to continue the ECA record review, to proceed with a system study and meter audit, and to prepare draft ordinances reflecting the board’s guidance for consideration at the next meeting.
