Cheap in Aspen: Electricity, water
There’s at least one thing in Aspen that is extraordinarily cheap.Hint: You’re getting a deal every time you plug in your hair dryer.The rates charged by Aspen’s municipal electric utility to residential customers are the eighth lowest among 51 utilities across the state, according to the Colorado Association of Municipal Utilities.Holy Cross Electric, which powers Aspen-area customers who aren’t in the municipal utility’s service area, was the 12th lowest in the January rate comparison.The city’s electric rates have gone unchanged for 12 years, and its water rates have remained stable for 17 years.Now, an outside consultant is helping the city utilities draft new business plans that may mean some rate increases.”The last time you adjusted [electricity] rates is amazing,” Denver-area consultant John Gallagher of Black & Veatch told the City Council last week. “Very seldom do I see a utility that hasn’t adjusted rates.””It’s just unheard of,” agreed Paul Menter, the city’s finance director.”It’s been too long,” added Steve Barwick, city manager.Both of the city’s utilities are in good financial shape, according to Barwick. Rate increases, if they are pursued, will be aimed at: maintaining an adequate capital reserve fund to keep the water and electric systems in good repair, promoting conservation of water and power by the city’s customers and purchasing additional energy from renewable sources.Currently, 57 percent of the city electric utility’s power comes from renewable sources – either wind-generated or hydro-electric power. The city is also a member of the Municipal Energy Association of Nebraska, or MEAN, a cooperative that produces energy from coal-fired power plants.Increasing the city’s use of renewable energy by 1 percent would cost an additional $18,000 annually, according to Gallagher.In studying the local utility rates, Gallagher said additional tiers for big users of power and water will be explored.A two-tiered rate structure for the electric utility would charge a higher rate to the biggest commercial customers.”I think you probably need to consider it,” Gallagher said.Those commercial customers who use a lot of electricity could see a higher rate for plugging in at peak times – when it costs the city more to provide that power. The “demand rate” would provide an incentive for customers to time their electricity use during non-peak times, Gallagher said.The city pays a premium for energy it buys from MEAN at peak demand times, but doesn’t currently pass those costs onto its customers, Gallagher explained.If Aspen’s rate structure encourages big energy users to reduce their electricity use during peak times, both the customer and the city utility would save on energy costs, he said.It could mean, for example, that a hotel chooses to run its dryers during hours of low overall demand, when it won’t pay a premium for electricity use, Barwick explained.The city already has a two-tiered rate system for residential water use, but 85 percent of its customers are charged the lower rate. An adjustment to the rate structure could put more users into the upper tier, where they’d pay more for water, Gallagher said.”I certainly would support looking at that,” Mayor Helen Klanderud said.Gallagher also suggested the city consider a third tier of even higher water rates for customers who consume the most water.”Water is almost free to some of these homeowners,” said Barwick, noting the indifference some second-home owners have to their water bills.The idea is to charge rates that encourage customers to conserve water, the city manager said.A comparison of average monthly water bills in 17 cities, including other communities in the valley and other ski resorts, put Aspen on the low end. The city is the sixth lowest; Frisco was the cheapest, and Winter Park was by far the most expensive, with Basalt the second highest on the chart.Aspen has to use caution in increasing rates, though, Menter warned. Customers respond to rate hikes by using less water or electricity; if they cut back use drastically, a utility can wind up taking in insufficient revenues to operate.”I think we need to move very carefully,” Menter said.Janet Urquhart’s e-mail address is firstname.lastname@example.org
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