Aspen electric rates to increase 20 percent
September 10, 2008
ASPEN ” Aspen Electric customers will likely see a 20 percent increase in their rates in the near future.
The revenue generated will allow for the public utility company to stabilize its operating reserves and create renewable energy.
The increased rates are estimated to generate an additional $1.1 million in revenue annually, of which $400,000 will be put toward several new programs that are designed to have the city-owned utility company operate on 100 percent renewable energy.
Currently, Aspen Electric operates on about 75 percent renewable energy sources, said Phil Overeynder, the city’s public works director.
The Aspen City Council on Tuesday signed off on the new plan, which was presented by Overeynder and Todd Cristiano, a senior consultant of Red Oak Consulting, who was hired to study the complicated rate structure.
The new rates will be based on consumption, with higher costs to those who consume more kilowatt hours on a monthly basis. The tiered structure is aimed at incentivizing customers to conserve energy. And for those who choose not to conserve regardless of the new rates, the additional revenue will offset increased energy costs, as well as pay for the new renewable programs.
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“It’s possible that some customers will see a decrease or a slight increase [based on their consumption],” Cristiano said.
For the average customer, the tiered rates will translate into a monthly increase of about $20. Aspen Electric has 2,852 residential and commercial customers.
The renewable energy programs include geo exchange and geothermal projects, as well as generating hydrogen and hydrogen fuel cells, a ground source heat pump project and micro turbines placed at various locations in Maroon and Castle creeks.
Another $400,000 will go annually toward paying for increased costs associated with buying energy from outside entities. The city’s contract with Holy Cross for transmission services, for example, have gone from $18,000 a month to $26,000.
“Without this rate adjustment, you’d be dipping into the negative,” Overeynder said of dwindling operating reserves in the Aspen Electric budget. He added that another $300,000 in revenue is being lost in planned service expansion to developments in the city that have been delayed.
City Manager Steve Barwick said it’s a been a few years since electric rates were raised and before that, it was a decade.
He added that if Aspen can reach 100 percent renewable energy through its own measures, it will be one of the first cities in America that can claim the title.