The Board of Public Utilities on Wednesday night approved a 4 percent electric rate increase.
The rate increase will go into effect March 1, according to BPU officials. It may result in an average residential customer increase of about $5.14 a month.
The 4 percent rate increase is an average, with the actual figures varying among customer groups based on cost of service and usage levels, a BPU spokesman said. An increase of 4 percent for 2017, beginning March 1, and 4 percent in 2018 was unanimously approved.
A BPU spokesman said the rate increase was necessary because of debt service coverage. Also, BPU needs to invest more than $220 million in nonenvironmental improvements. There are plans for improvements to aging infrastructure, including downtown and Rosedale substations, according to the spokesman.
An environmental surcharge (ESC) increase will result in about $2.50 increase in the average residential customer’s bill.
The BPU spokesman said the board asked staff for no more increase than was needed.
The BPU has controlled costs, the budget was reduced by 25 percent and staff levels have been reduced by about 25 positions, the spokesman said. The BPU is doing what it can to control internal costs, he added.
Rate hearings on the increase were held starting in 2016, and based on a cost of service rate study, the staff recommended several adjustments.
According to a BPU news release, the increase in the electric rate and the adjustment in the ESC were necessary for these reasons:
• BPU needs to invest more than $222 million in non-environmental capital improvements to maintain the integrity of the utility system.
• The utility hasn’t adjusted rates in three years, with the last increase in 2013, and rates are below the national average and that of surrounding utilities.
• Postponing an adjustment would delay capital and aging infrastructure improvements needed to support new growth in our community and may cause delays or service disruptions in certain areas.
• Inflationary pressures on costs of outside services, materials, and labor continue to increase.
• BPU has worked with an average of only 65 days of operating cash on hand over the last three years (with 90 days recommended to maintain solid credit ratings).
BPU water rates are not affected by this electrical rate increase, according to the spokesman.
The Unified Government should stop giving out tax breaks and utility breaks to attract companies to this community, then turn around and raise our taxes and utility rates to pay their bill. We pay these high utility bills and some of the street lights in the community are substandard, we pay high taxes in some of our communities and a lot of our streets and parks are skipped over by the Unified Government. One of our communities is being taxed and getting no representation. I know nothing is going to change until we unite and make things change. So take care Unified Government, next election we’re going to shake the tree and see what falls out.