City Light customers are reminded that starting in January 2013, an average rate increase of 4.4 percent goes into place.
The rate changes were approved unanimously by the City Council in September as part of the six-year strategic plan for the utility. The strategic plan outlines investments to enhance reliability, customer service, environmental leadership, technology and the skilled workforce necessary to run the non-profit, municipally owned utility. It also commits the utility to saving at least $18 million per year by the third year of the plan by improving operational efficiencies.
A full rate review was conducted as part of the rate-setting process to ensure that the cost to deliver service was applied appropriately across all customer groups. The cost of service includes the cost of the electricity itself and the cost of delivery through City Light’s system. In 2013, the City Light Review Panel will take up a review of the utility’s rate design and will be seeking customer input during that process.
Some of the drivers of the rate increase include system maintenance and infrastructure improvements for enhanced reliability. This includes the planned Denny Substation.
The 2013 rate impacts vary for different customer groups. This is for two reasons – the actual cost of energy and then the cost to the utility to deliver power to various customers. The utilty hadn’t done a cost-of-service adjustment since 2007. The 2013 rates reflect that adjustment. For example, large power users’ delivery costs make up a much smaller percentage of their total power cost. The majority of their costs are for the energy itself and with lower market prices for power, it means lower overall rates. Residential and small business customers use much less electricity, yet the cost of deliverying that power has gone up and they will see a larger rate increase. This is especially true with the utility’s network customers that demand high reliability increasing the cost of energy delivery.
The rate changes for 2013 are summarized in the table below:
|2013 Rate Changes|