Utility rate debate continues
January 5, 2006
The debate over utility rate increases isn’t over yet.
From the looks of facts and figures presented by members of the public and the Truckee Donner Public Utility District board, the final approval of the 2006 budget could be contentious.
The utility district budget proposes 7 percent increases for both electricity and water. The rate increase, utility district managers say, will cover operation cost increases, equipment replacement and a new power supply contract the district will enter in 2008.
“I believe that over the next three or four years, we are going to try to gradually ramp up our electric rates to where we think we are going to be when we enter into the new power contract, so that there won’t be a big jump in one year,” said Peter Holzmeister, utility district general manager, at Wednesday night’s board meeting.
However, some residents said they don’t see the increases as the best way to do business. Some said the district should reduce spending rather than increase income.
“We are not opposed to a 2 percent reserve increase, but we are asking you to pull out your pencils and take 2 or 3 percent off of the budget,” said Geoff Stephens, general manager of the Glenshire Devonshire Residents Association.
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“Seven percent is substantial. We don’t want you to make stupid cuts, but I have to believe that there is 2 percent (to cut) somewhere,” he said.
The staff began to gather the 2006 budget in September 2005 by preparing operation cost estimates and identifying problem areas that include the replacement of leaking water lines and fuse cutouts that reduce power outages caused by birds and animals.
“We have been battling a problem for the past several years with parts of the water system that are aging and developing leaks, and over a period of time we have found that we are actually losing ground against leaks, and we need to budget for a pipeline replacement project,” Holzmeister said.
In addition, the district is also concerned about a spending spike that might occur when the utility district enters a new power supply contract in 2008, he said.
“Right now we are purchasing power significantly below market rates, and we suspect that (with the new contract) we will be paying a higher wholesale price,” Holzmeister said.
A final decision on the 2006 utility district budget and the proposed rate increases has yet not been made, but could be at their next meeting on Jan. 18. Public input will also be heard at that meeting.