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Electric rates to rise

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news Worthington, 56187
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Worthington Minnesota 300 11th Street / P.O. Box 639 56187

WORTHINGTON —Electric bills for Worthington Public Utilities customers will be increasing in 2014.

In its regular meeting Monday afternoon, the WPU Water and Light Commission decided to raise its electric rates, effective in January.

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The customer charge for all residential is increasing by $.50, while the commercial charge is going up $1 and the median commercial and industrial charges are going up $5. The rate per kilowatt hour is also increasing slightly.

For residential customers, the change from 2013 to 2014 will be between 3.32 percent and 3.88 percent. Commercial customers could see increases from 2.81 percent to 3.52 percent.

“We got a look at what the rate increase was we were looking at, which was in that 7.5 percent range for the residential customers down to about 5 percent for industrial customers,” WPU General Manager Scott Hain said. “Then, at our last meeting, we had a presentation of the rate study. Based on conversation there, we put the budget together, and based on the commission’s desire to try to take that increase over a couple of years is what I’m presenting to you today.”

At the last meeting, the commission decided to spread the increase over two years.

“In a nutshell, what was proposed at the last meeting and what is being proposed today is to cut those rates in half,” Hain said. “We’ll see how things play out through the year whether we need the entire second half next year or not. We’ll deal with that when the time comes.”

Hain said the reason for the increase is solely based on outside costs —things WPU can’t control.

“As you know, the big driver for the proposed rate increase was purchased power and transmission — specifically, Missouri River (Energy Services) had about a 5.5 percent rate increase,” he explained.

Purchase power from MRES is increasing by 7.1 percent, which represents “an increase of about 680,000 for that single line item,” Hain said.

Transmission costs are also increasing significantly.

“That’s about another $760,000 increase right there,” he said. “You take those two numbers essentially together and you get a total increase in cost of almost $1,442,000.”

However, not all of the cost will be brought back to the customers this year.

“I like what you’ve done here. I think you’ve done a nice job,” commission member Randy Thompson said.

“It’s another justification for having reserves,” Hain said. “If we were sitting here and seeing a $1.5 million increase strictly due to purchase power and transmission and not have money in the bank and not have the flexibility, you’d have to pass all that on at once.”

In other commission business, Hain gave an update on the city’s water supply. A ban on non-essential water use is still in place.

“In Well 26, it’s doing what it normally does this time of year and that’s dropping,” he said.

Recently, the levels have not been dropping significantly —and the levels even rose last week.

“As of last Friday, we are 4 four feet, 10 inches below the 15-year average,” Hain said. “The good news is we are 5 feet, 4 inches better off than we were the same time last year.”

The commission also directed staff to explore the option of purchasing a tablet to allow the members to receive electronic agendas and documents.

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