Utility seeks 5 percent rate increase | SierraSun.com

Utility seeks 5 percent rate increase

In a special budget workshop held Nov. 25, Truckee Donner Public Utility District General Manager Peter Holzmeister presented a number of proposals for the TDPUD’s 2004 budget to the district’s board of directors. At the top of the list was a proposed 5 percent rate increase for both residential and commercial water and electric customers.

Other notable proposals included a restructuring of the TDPUD’s commercial water rate schedule, designed to encourage large water users to conserve water.

Holzmeister began the workshop by giving the board of directors a general overview of the TDPUD’s current financial situation. “In general our electric utility is very strong financially, the water utility is a little tougher,” Holzmeister said, noting that the TDPUD’s water reserve fund is currently less than one-fifth of the amount suggested in the TDPUD’s Finance Master Plan.

In part to help build up those reserves and to keep ahead of future expenses, Holzmeister recommended the board adopt a 5 percent across-the-board rate increase for both residential and commercial water and electricity rates. “When you really get down to the bottom of all this, this budget proposes rate increases,” Holzmeister said.

On the electric side, Holzmeister estimates that a household that uses 500 kilowatt hours per month will end up paying an additional $3.15 each month, while a household that uses 1,000 kilowatt hours will pay $5.81 more a month. The average Truckee household uses 700-800 kilowatt hours each month, according to the utility district.

Commercial customers can expect to see a similar 5 percent increase in their electric bills if the proposed budget is approved.

Currently, residential water customers pay a flat-rate monthly fee plus a pumping fee (which varies depending on where one lives in Truckee). The proposed 2004 budget includes 5 percent increases in these charges as well, resulting in a $1.50 – $3 monthly rate increase.

Commercial water rates appear subject to greater changes as the TDPUD staff has recommended amending the current “declining block rate schedule” that Holzmeister says rewards customers who use a lot of water.

“Declining block rates are thought to encourage the overuse of water,” Holzmeister said, adding that the TDPUD’s declining block rates are a legacy from 20 years ago when such rate schedules were common. According to Holzmeister, the TDPUD has just now gotten around to rethinking the commercial water rates. They hope to implement a flat-rate for large-scale commercial water customers that they hope will encourage water conservation.

Holzmeister recommended the 5 percent rate increases in order to keep up with rising costs associated with delivering water and power to Truckee consumers. The TDPUD staff felt that it would be better for consumers if the TDPUD raised rates gradually over the years rather than waiting until rate increases were desperately needed and then raising rates quite a bit.

Although rate increases are never a popular option, members of the board of directors seemed to agree that gradual increases were preferable to dramatic changes.

“I don’t think the general public understands the inner workings of this (the TDPUD),” said board Vice President James Maass. “We have too many people who expect something for nothing. … And as long as they can walk over and turn on the lights, they’ll be happy; but as soon as that doesn’t happen, they’ll be down here yelling at us.”

The Nov. 25 meeting was one in a series of budgetary meetings held by the TDPUD. The next meeting will take place Dec. 17 at the TDPUD boardroom, and the public is welcome to share their thoughts and opinions on the TDPUD’s proposed budget. After that meeting, the board of directors will vote on whether to adopt the budget as is or make changes. If the proposed rate increases are adopted, they will take effect 30 days after the budget is approved.

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