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Back to the Drawing Board; City Council Denies Electric/Sewer Rate Change 4-2

Back to the Drawing Board; City Council Denies Electric/Sewer Rate Change 4-2
June 09
14:51 2016

A 3.2% decrease in electricity rates was put on hold by City Council last night as Council decided to send the proposed rate change back to the PUE board.City Council Generic small

A base rate increase for commercial sewer customers only, based on meter size, was the hang-up on the proposed rate change. The reason for the proposed rate increase in sewer rates was to put more money into the sewer utility coffers to go towards much needed infrastructure repair.

After some business owners expressed concern that the burden was unfairly thrust upon them, especially those who are low use commercial users; Council voted 4-2 against the proposal.

Council recommended the PUE board look at other options, including possibly raising residential sewer rates, in order to get the much needed money into the sewer utility.

The electric rate reduction was proposed because Page’s Wholesale Power Cost has outperformed the fiscal year 2016-2017 budget. With the reduction in budget cost, the Utility wanted to pass the savings onto the ratepayers. Together, the 3.2% decrease would have saved ratepayers a combined $280.000.

For how well the electric utility is doing, inversely, the sewer utility is in rough shape. Currently, Capital Funds are inadequate.These Capital Funds are normally included in rates, and are needed to replace equipment such as pumps, motors, controls, tools, power equipment, and vehicles. In 2012, the Electric, Water, and Waste Water Utilities merged and under the direction of Council, it was required that each fund remains sterile. Meaning electric money stays in electric, water money stays with water, and waste water money stays with waste water. For this reason is why electric rates were recommended to go down, while sewer rates went up for commercial users.

The raise in rates would have not only helped increase the sewer utility’s coffers but would have also caught Page up with industry standards. Currently, commercial and residential customers are charged the same base rate of $4.00, regardless of meter size, and a volumetric charge of $4.18 per 1,000 gallons. The proposed increase would have established a tiered system for charging commercial customers more, based on meter size, while the volumetric charge would have stayed the same.

The ball got rolling on these rate hearings back in February when Council advised PUE to implement commercial sewer rates based on the findings of an outside waste water rate study. Throughout the public comment process there were no intervenors  and the only public comment received was from a City Councilor.

However, at last night’s City Council meeting, multiple business owners voiced concerns about the commercial rate increases. The gist of the grievances was that  it was unfair to potentially lump low usage commercial users with high usage users such as hotels and restaurants.

Dugan Warner, one of two councilors who voted for the rate change, understood the concerns but said that a provision in the rate increase stated that PUE would install the proper size meter if needed. Theoretically, this would prevent low usage customers like banks and office complexes from being grouped with the high usage customers.

Warner also believed that the 3.2% decrease in electricity costs would also help offset any additional sewer costs that businesses would  incur. Korey Seyler was the only other councilor to vote for the rate proposal.

Levi Tappan, Scott Sadler, Vice Mayor John Kocjan, and Mayor Bill Diak, all voted against the rate proposal; defeating the proposal and effectively sending it back to the drawing board.

Councilor Mike Bryan was absent from the meeting.

Had the rate change passed, the new rates would have gone into effect July 1st.

As of now, rates will stay the same for at least the next 120 days as the rate hearing proceedings will start over again.

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