Power price hikes to hit businesses, utility districts
October 9, 2006
Power price hikes that kick in next month in the Tahoe Basin will hit large businesses and local utility districts, some of the area’s largest energy users, with a small fortune in added costs.
Sierra Pacific Power electricity prices are set to jump an average of 16.5 percent on Nov. 1 in the Tahoe Basin, signifying an average $13 increase for residential customers per month. But local utility districts, which spend hundreds of thousands of dollars each year to power their water and sewer pumps, and ski resorts, which run their lifts on the energy provider’s power, are anticipating thousands of dollars added on to their bills each month.
“We weren’t anticipating that much of an increase,” said Cindy Gustafson, assistant general manager of the Tahoe City Public Utility District.
The district pays nearly $250,000 each year just to power its water and sewer systems, she said.
A 16.5 percent increase means approximately $40,000 more in electricity bills for the district.
In calculating their new budget, and proposed rate increases, the district anticipated an increase of 10 percent from Sierra Pacific Power, Gustafson said.
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Sierra Pacific’s rate increase, which pays for a $11.2 million shortfall in fuel costs to generate energy, follow a 6.4 percent increase that went into effect on Sept. 1. The September increase paid for infrastructure, salary and equipment inflation, said company spokeswoman Faye Andersen.
“The price of energy, that is what has been really volatile. And generally up and not down,” Andersen said.
Lumped together, the increases total an average 22 percent hike for residential customers. And some businesses, depending on their classification, have been hit even harder.
Squaw Valley USA will see a 20 percent increase from the November adjustment alone because of the classification the company is filed under, said resort spokeswoman Savannah Cowley.
“It is a big deal,” she said.
Cowley declined to say how much money the increase will add to the ski resort’s energy bill.
But the resort’s efforts to develop alternative energy sources and more energy efficient operations are paying off now more than ever, Cowley said.
“Since the early ’90s we’ve implemented a number of innovative alternate energy sources,” said Cowley. “This [increase] will prompt us to be more efficient.”
Several buildings at the resort are warmed by geothermal pumps, using the earth’s own heat to warm the facilities, Cowley said.
Excess heat energy that would normally be absorbed into the air, such as the heat of the machinery in the Funitel building, is put to a second use melting snow or warming rooms, said Cowley.
The resort received a $2,400 rebate check from Sierra Pacific Power when it began using geothermal energy, according to the resort, and has been saving on energy costs ever since.
Approximately 80 percent of Sierra Pacific’s 46,000 California customers reside in the Lake Tahoe Basin. The company’s California service area extends from Portola in the north to Markleeville and Topaz Lake to Coleville in the south. Sierra Pacific has approximately 275,000 customers in northern Nevada.
The company filed a request to the California Public Utility Commission in April 2006 to recover additional costs of energy such as fuel to generate electricity and purchases of power on behalf of customers, without making profit on the rate increase.
The filing is made when the utility must purchase energy that costs significantly more than it charges customers and needs to adjust rates to recover the costs that are not included in current rates. When energy costs are lower than the company charges its customers, the company requests to lower rates.
The last time that Sierra Pacific Power asked to recover costs by raising rates was two years ago, according to the company.