City electric rates going up next year
GLENWOOD SPRINGS – City of Glenwood Springs electric customers will most likely see an increase of 20 to 25 percent in their monthly bills starting next year, regardless of whether the city ends up working out a 10-year or 30-year contract for its wholesale power supply.
How much of an increase remains to be seen, Glenwood Springs Public Works Director Robin Millyard indicated in a recent memo to city manager Jeff Hecksel and City Council.
Council voted at a special Jan. 12 meeting to pursue the shorter-term “Service Schedule K” contract with the Municipal Energy Agency of Nebraska (MEAN).
The decision came amid concerns by council members and several renewable energy proponents that the recommended long-term contract would limit the city’s ability to develop local energy resources, such as solar, hydroelectric and geothermal.
Under the shorter-term deal, though, the expected rate increase would be 5 percent higher than with the 30-year deal, Millyard said.
“Regardless of what course is followed for a future power supply contract, the rate payers will have to see an increase beginning with the January 2013 billing,” Millyard wrote in his memo.
Calculations are hard to make until the actual 2013 wholesale rate is established by MEAN, he said.
But, based on the most recent wholesale rate charged to the city and projections over the next year, the increase to individual customers under a new contract would be between 20 and 25 percent.
For the average residential electric customer, that would translate to a monthly bill increase from about $53 currently to $63 under the 30-year deal, and nearly $66 with the 10-year contract.
Small commercial customers would see their average monthly bill increase from about $189 currently, to $227 or $236 under the respective power supply packages.
The city’s current 10-year contract with MEAN expires at the end of this year. Millyard, along with MEAN officials, had recommended the 30-year contract as the best rate option for the city.
But the Schedule K option is less binding when it comes to the city’s future ability to pursue local power generation.
The city is still hoping to convince the MEAN board of directors to increase a 2 percent (768 kilowatt) limit on local power generation contained in the 30-year Schedule M contract provisions.
“If that 2 percent is just a placeholder, then it’s something we need to talk about,” City Councilman Leo McKinney said. “It needs to be higher … 10 percent, even 25 percent.”
Andrew Ross, energy services manager for MEAN, said at last week’s meeting, that it may be possible to increase that limit, but the decision would be up to the MEAN board.
It’s also possible, if the city chooses, to switch over to the long-term contract before the 10 years is up on the Schedule K contract, he said.
City electric customers saw a 3 percent increase in electric rates last summer. It was the first rate increase since 2007, and was done in anticipation of the much larger increase expected in 2013.
Still, Glenwood Springs’ municipal electric rates have remained among the lowest in the state for residential customers.
According to a January 2011 rate comparison by the Colorado Association of Municipal Utilities, Glenwood’s residential electric rate was second lowest in the state for a typical single-family home.
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