Members of the Richland City Council on Tuesday said that they would prefer to phase in electric utility rate increases over time rather than delay and possibly face a higher lump sum increase.
The council has been discussing electric utility rates in recent months since Energy Services Director Bob Hammond told them a rate increase is necessary to keep up with the cost of providing the service.
Otherwise, the electric utility could be looking at a $5 million revenue deficit for 2012.
In particular, the city faces rising costs to purchase power from the Bonneville Power Administration, and pressure from federal and state energy policies, including a voter-approved state initiative that requires utilities to meet targets for having renewable energy sources such as wind and solar in their portfolios.
On Hammond’s recommendation, the council on Jan. 4 gave approval to raising user rates for the city’s electric utility by 5 percent for residential customers and 10 percent for all others.
That would amount to a $5 increase on a $100 residential bill or a $10 increase on a $100 bill for all other customers.
Hammond in a memo Jan. 12 suggested an alternate plan that would delay rate increases until at least September.
Under the new proposal, the city would use existing cash from reserves to cover expenses not covered by existing rates while the Utility Advisory Committee and Hammond’s department work on a new rate plan.
But some council members were concerned about using reserves – and about the effect on customers if a rate increase is delayed and the city ends up having to adopt one larger than already proposed.
“I don’t want a big increase all at once,” said Mayor Pro Tem David Rose. “We should increase in small step increments. … I’m not in favor of postponing the rate increase that has to come anyway.”
Rose suggested the council consider a 3 percent increase for residential customers and 7 percent for other types of users while more work is done to figure out a long-term plan.
Hammond countered that postponing any increase would give him more time to collect public input on a new rate structure.
“What’s being proposed now gives customers time and a basis to understand,” he said.
The council likely will discuss electric rates again at a workshop in February.
— The council interviewed four candidates for the Richland Public Facilities District Board to fill a position being vacated by current Board President Joel Rogo.
Rogo announced last fall that he intends to resign from the board once the council appoints a replacement.
Candidates interviewed Tuesday were Don Williams, a field representative for Plumbers & Pipefitters Local 598; Ellen Low, executive director of the Columbia River Exhibition of History, Science, and Technology museum; Thomas Helgeson, vice president and area manager at CH2M Hill; and Steven Simmons, owner of The Country Gentleman in Kennewick.
The council expects to select a new board member at its Feb. 7 meeting.
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