Consultant recommends 2.75% electric rate increase to preserve Oak Ridge utility finances

Rate consultant Chris Mitchell presented a long‑range financial review of the city's electric utility and proposed a modest rate increase of 2.75%, to take effect in October, to stabilize cash and fund needed pole, conductor and substation work. Mitchell said the increase would generate an estimated $1.6 million and keep the utility from falling behind amid rising operations and maintenance costs and changes in TVA's wholesale charge structure.

"It would increase your revenue 2.75%. It would be this October," Mitchell said as he summarized the recommendation and noted many utilities in the region have taken similar steps to keep pace with inflation and capital needs. The presentation detailed how per‑customer energy sales have been flat or declining even as population grows, creating pressure on rates when fixed grid access charges and rising capital costs are embedded in TVA charges. Staff and the consultant urged steady, predictable annual adjustments rather than deferring increases and risking larger step changes later.

Dave Cross, the electrical director, reinforced that the city has older poles and infrastructure requiring steady replacement and that last year’s loan was used to bolster available cash. The consultant and staff emphasized council will consider the proposal as part of the budget process and that no vote was taken at the work session.