Geneva residents to see electric rate increase

Geneva residents will see an increase in their electric rates, but how much and for which customers has not been decided.

According to the results of an electric rate study, the customer charge would go from $6.75 to $8 a month, the first 500 kilowatt-hours used would go from 11.2 cents to 13.06 cents and more than 500 kilowatt-hours would go from 10.05 cents to 10.26 cents.

The current average charge for residential electricity is $107.06, according to a recent rate presentation. That includes $100.31 for the electricity and $6.75 for the customer charge.

The proposed rate would increase the electricity cost to $108.73, which would be $116.73 including $8 for the customer charge.

A kilowatt hour (Kwh) is a unit of energy equal to one kilowatt of power sustained for one hour and is commonly used as a billing unit by utilities. A kilowatt (kW) is a measure of the rate of electricity used.

For more than an hour, city council members at a July 3 committee of the whole meeting heard Superintendent of Electrical Services Aaron Holton and Eric Kamm of Stanley Consultants present the rate study.

The city's electric utility has fixed costs that have to be passed on to customers regardless of how much or how little power they use.

Fifth Ward Alderman Craig Maladra said the electric utility's infrastructure is the same no matter the usage.

"Even if we only use the lights for one hour a month, we expect the lights to come on when we turn the switch," Maladra said. "We're talking about paying for the mechanisms or infrastructure that enables us to do that. In reality, whether we are consuming less with high efficiency appliances ... or we're energy hogs with wasteful appliances, the infrastructure cost is still the same to both of us."

In addition to maintaining the electric utility infrastructure, the rates need to generate enough revenue to pay off $30 million in bonds to build more substations for the industrial areas being developed on the city's east side, Kamm said.

"So we need to make sure we cover for (industrial build out) ... If you project out to 2028, it's about a $3.5 million shortfall (for debt service)," Kamm said. "We see a need to increase the overall revenue by just under $4 million."

That estimate is based on current revenue, he added.

Kamm said the rate study does not anticipate major industrial growth in kilowatt hour sales because there aren't any contracts at the moment.

If there is large industrial growth, as anticipated, rates can be reevaluated to consider the additional power demands, Kamm said.

The overall revenue increase requirement by 2028 is 11.45%, Kamm said.

Most ratepayers are residential - 8,597 accounts. The true customer charge to be connected to the city's electric utility is $27.24 - not the $8 that is being proposed. The average residential electric customer uses 751 kilowatt-hours in a month.

"The reason for a blocked rate charge like this is to recover additional fixed costs," Kamm said. "You're collecting an extra $14 in that first block per customer."

The city council also will consider how to manage customers with solar power and handle an expected increase in electric vehicles.

The presentations are on the city's website, geneva.il.us.