City ready for utility rate hikes |

City ready for utility rate hikes

Janet Urquhart

Close to 80 percent of the power used by Aspen’s electric utility customers could be generated by renewable sources under a proposed rate-hike scheme endorsed by the City Council on Tuesday.The council also gave an informal nod to higher water rates during yesterday’s work session.Given the option of bumping up electric rates a bit, or a bit more, council members favored the bigger hikes, which will allow Aspen’s electric utility to purchase greater amounts of power from renewable sources – hydroelectric and wind-generated power. Currently, 57 percent of the utility’s electricity is provided by those sources; the rest comes from coal-fired power plants.Councilman Terry Paulson pushed his colleagues to go for the larger increase in rates and renewable energy.”I think we need to be as aggressive as possible here,” he said.Mayor Helen Klanderud wasn’t so sure, though she was willing to consider the plan. She also suggested the council leave the more modest hikes on the table for further consideration.”You know, low is not bad, when you’re charging people for water and heat,” Klanderud said.”I don’t think any of these are so draconian that you’re going to get a lot of resistance,” said Steve Barwick, city manager.The city’s electric rates have gone unchanged for 12 years, and its water rates have remained stable for 17 years. Now, rate hikes are contemplated both to keep up with utility costs and capital needs, and to encourage conservation by charging more to those who use more.Formal approval of the new rate structures is anticipated this fall after public hearings. Because Aspen operates under a home rule charter, the council can enact the rate hikes; approval by the Public Utilities Commission is not necessary. The new rates would go into effect in January.For the electric utility, the city is looking at dividing residential customers into three blocks, with those who use the most paying the highest rates. Currently, all residential consumers pay the same rate. Commercial users would be divided into two groups; roughly the 50 largest users could face substantially higher bills if they use power during periods of peak demand, when it costs the utility more to provide power. The idea is to create an incentive for those customers to use electricity at off-peak periods.For the typical residential user who logs 700 kilowatt hours of energy use per month, their electric bill would jump from $50.23 currently to $52.33 in 2005.A large commercial customer that uses 20,000 kilowatt hours per month would see their bill go from $1,409 to anywhere from $1,460 to $1,720, depending on how they time their energy use.The proposed water rate hike would be phased over four years, from 2005 to 2008.A typical residential customer who uses 5,000 gallons per month would see their bill increase from $18.30 under current rates to $18.87 per month in 2005; $20.95 in 2006; $23.35 in 2007; and $24.23 in 2008.The proposed rate hikes would increase annual revenue for the electric utility by 19 percent and, by 2008, by 33 percent for the water utility. Rates to consumers, however, would increase by varying percentages, with the bigger users seeing the biggest increases, according to Phil Overeynder, utilities director.Janet Urquhart’s e-mail address is

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