The End Result

By Mike Kanin, Fri., June 15, 2012

City Council went late into the evening June 7 before delivering a final verdict on AE rates. In short, $106 million in additional revenue – the total amount the utility says it needs to begin refilling its reserve funds – played a key role, with council hoping to stake out ground to avert a second rate case. To be clear,
$71 million was the magic number to return the utility to relative solvency – and the amount approved by council. By declaring $106 million as the total revenue bump needed, but only requesting $71 million for now, the utility is attempting to reserve the right to ask for $106 million as part of the rate case, but will bow to council requests to scrub its budgets and reserves to cut costs. We'll see if it works.

The bottom line for the average residential home beginning in October includes:

A fixed $10 monthly customer charge, up from the current $6 fee.

An 8-9% increase in purely volumetric charges for the average ratepayer, who uses up to 1,250 kilowatt-hours per average month (see chart).

A new consumption-based charge for low-income assistance, streetlights, and energy conservation programs. This new Community Benefit Charge line item will total $5.64 per 1,000 kWh.

Solar customers will reportedly see a benefit from a switch from net metering to gross metering.

Overall impact: Summer electric bills would go up by $10-$24 per month for small to average users. Winter electric bills would go up by less than $7 per month.

The average increase for residential customers is about 14%. The overall system increase is 7%.

New Five-Tier Residential Base Electric Rates

The base electric rate will actually go down for the very smallest users, then rise progressively.
Rates are in cents per kWh of usage. (Nonsummer/summer*)

Energy Use rates New Rates Current
First 500 kWh 1.8 / 3.3 3.55 / 3.55
501-1,000 kWh 5.6 / 8.0 6.02 / 7.82
1,001-1,500 kWh 7.2 / 9.1 6.02 / 7.82
1,501-2,500 kWh 8.4 / 11.0 6.02 / 7.82
2,501 kWh and up 9.6 / 11.4 6.02 / 7.82

* Summer rates will now apply for four months (June-September) instead of the current six (May-October).

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