By By MIKE VOSS
Contributing Editor
The Washington City Council has authorized a rate study to help it consider adjusting electric-rate classifications to make them more equitable.
The council believes some Washington Electric Utilities customers are paying too much of the city’s power costs and others are paying too little.
A cost-of-service study presented to the city in February 2008 determined that under a true cost-of-services basis some classes of power customers had been slightly overcharged and others slightly undercharged.
The study determined a 3 percent rate increase for residential customers would help make the rates more equitable. The study also concluded the city could help make the rates more equitable by altering other classes of customers: a 2 percent rate decrease for small general-service customers; a 1.4 percent rate increase for medium general-service customers; a 1.5 percent rate decrease for large general-service customers; a 2.1 percent rate decrease for industrial-service customers, and a 14.9 percent rate increase for outdoor lighting.
Last summer, the council increased retail rates by 1.189 cents per kilowatt hour.
The council also increased the rate charged to medium general-service customers by 1.4 percent and also increased the rates charged for rental outdoor-lighting service and street-lighting service by 14.9 percent. The study indicated that customers in those rate classes were not being charged enough to cover the cost of providing service.
The council made no changes to other rate classifications.
During the council’s budget work session Monday, Mayor Pro Tempore Doug Mercer said it’s time for WEU to adjust its rate classifications to reflect the true costs of providing service to customers in those classifications. Councilman Archie Jennings agreed.
“Instead of tinkering with it from month to month, I’d rather do it at one time,” Jennings said.
With information the rate study would provide, the council would be in a better position to determine if the rates need adjusting.
WEU Director Keith Hardt agreed that a rate study is needed.
Mercer has previously said that because most of WEU revenue is generated by residential customers, the city should shift some revenue-generating burden to other categories of power customers. Doing that could reduce or eliminate the need to increase rates for residential customers, he said.
The goal of the rate study would be to provide an equitable distribution of costs to provide power to all of WEU’s customers, Mercer said Monday.