Aspen to discuss electric rate hikes |

Aspen to discuss electric rate hikes

Andre SalvailThe Aspen TimesAspen, CO Colorado

ASPEN – The Aspen City Council will hold a work session Tuesday afternoon to discuss the possibility of raising electricity rates within its service area, which includes the downtown area and West End neighborhoods.The meeting starts at 4:30 p.m. at the council’s chambers, in the basement of City Hall, 130 S. Galena St.The city is seeking to close the gap between the amount of electricity revenue it’s estimated to bring in during 2012 and future years, and the rising cost of providing the service. A Denver consultant predicts that discrepancy will be about $300,000 next year.On July 18, council members held their first work session on the issue, which involves two options. The first alternative would involve restructuring the rates over four to six years to bring all four of its customer categories – residential, small commercial, large commercial and city facilities – up to par with the cost of delivering power. The rate increase would differ for each category.The second alternative would involve a more uniform method of restructuring rates by implementing an 8.6 percent across-the-board increase over four years: 2012 to 2015.According to a new memorandum prepared by Aspen utilities director David Hornbacher, the council offered the following comments to city staff in July that mirror the staff’s suggested route:• The council favors developing a cost-of-service system that’s based on the cost to deliver power to specific consumer groups (Alternative 1).• If chosen, the cost-of-service approach should be phased in over a number of years rather than immediately implemented (Alternative 1).• If the cost-of-service system is not adopted, increased costs should be passed on to customers using a uniform percentage adjustment (Alternative 2).The utilities department recommends either option. The memo states that each alternative is “consistent with council’s direction” from a July 2010 presentation of an electric-rate study as well as the work session nearly two months ago.The city says that a Nebraska municipal utility that provides all power to Aspen not generated by two local hydropower plants has increased wholesale electricity rates during the past three years. Meanwhile, the council has not raised customer rates since 2009 because of the economic downturn.Areas of Aspen that aren’t served by the city’s power utility are handled by Holy Cross

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