City Council tables proposed electricty rate hike

Washington City Offices, Washington City, Utah, June 2015 | Photo by Mori Kessler, St. George News

WASHINGTON CITY – A proposed hike in the city’s electrical rates was tabled by the Washington City Council Wednesday night following concerns expressed by council members and citizens. A financial analyst told the council the hike would be needed to help avoid shortfalls while the council decided it wanted a second opinion.

Mark Beauchamp, of Utility Financial Solutions, told the council it would need to raise energy rates 20 percent over the next three years in order to keep the city out of a possible $1 million shortfall. Beauchamp’s company was hired last year to perform a cost-of-service analysis for the city’s power utility.

The proposed rate increase would bump rates up around 5 percent across the board, with residents paying an increase of 6 percent. Small and large commercial customers would pay an increase of 5 percent and 3 percent respectively.

The proposed rate adjustment came as a surprise to council members who balked at the increase due to the belief the city has been operating its power utility in an efficient manner.

For the last six to 10 years, the city has been progressing with its power utility, and during some of those years it has operated with a financial surplus, Councilman Thad Seegmiller said following the meeting.

“We’ve had years we’ve put that surplus into reserve accounts and then we’ve done a few projects,” Seegmiller said. “… Everytime we asked the staff, ‘Will this proposal cause an impact to our rates?‘ And the answer was always, ‘No.’ So that’s why we’re surprised.”

Beauchamp said the city’s capital related projects were a small factor included in the projections his company used in it’s analysis. Many of the costs incorporated into the study are ones beyond the city’s ability to control, he said. He also cautioned the city against delaying implementation of the rate increases, as it could ultimately lead to a sharper increase later on.

Whenever you delay a rate increase adjustment it tends to make things worse over time,” Beauchamp said.

According to Beauchamp’s projections, residential costumers who pay a monthly average of $78 for power would see a jump of 6.13 percent to just below $83. The rate was based on a monthly average use of 820 kilowatt hours.

The council members remained skeptical as they and residents who attended the meeting began to suggest an independent expert be brought in to check the numbers and the city’s efficiency.

Washington City hasn’t changed its power rates since 2006. Seegmiller said that it will likely have to increase rates at some point in the future, as other municipalities have, to accommodate rising costs. For the time being, however, any electricity rate adjustment has been postponed.

This is a hard discussion and a hard topic to talk about,” Mayor Ken Neilson said.

Other business

In the last City Council meeting of the year, sitting council members and city staff bid farewell to outgoing council members Kress Staheli and Ron Truman. Both served a single term on the council and chose not to run again.

“Gentlemen, thank you so much for your service,” the mayor said at the close of the council meeting.

Filling the seats left by Truman and Staheli are incoming council members Kolene Granger and Troy Belliston.

A public hearing was held concerning the city’s intent to apply for a federal Community Development Block grant to fund improvements to the downtown area. This would take the form of installing curb and gutter and improving drainage, City Manager Roger Carter said.

Washington City also entered into an interlocal agreement with Washington County in order to commit a Washington City Police officer to the Washington County Bomb Squad on a part-time basis.

Ed. note: The name of the company hired to conduct the analysis has been corrected.

Email: mkessler@stgnews.com

Twitter: @MoriKessler

Copyright St. George News, SaintGeorgeUtah.com LLC, 2015, all rights reserved.

 

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