Selma Plans To Tweak Power Rates In Early 2017

Selma Town Manager Jon Barlow presented a electric rate study to members of the Selma Town Council. The new rates, which could be adopted in March, could bring a slight increase or decrease in monthly power bills for businesses and homeowners. Photo

Some customers could see 1 percent decrease or increase

Under a proposed new rate design unveiled this week, Town of Selma electric customers could be pay slightly more or slightly less for power service starting in early 2017. The changes would be slight, no more than a one percent increase or one percent decrease on average depending on usage.

Town Manager Jon Barlow presented a rate study by Utility Financial Solutions, LLC (UFS) to the Town Council, which reviewed the financial projections and targets of the electrical department through the year 2021.

Barlow said the majority of residential and business customers would see a small decrease while a few customers would pay more.  The study suggests increasing the monthly base rate, while lowering the kilowatt hour costs.

Under the proposal, base rates for a residential power customer would increase 11.1 percent from $7.65 per month to $8.50 while the cost per kilowatt hour would decrease from 0.1157 to 0.1142.  The average customer who uses 1,000 kilowatt hours each month would see a 26 cents drop in their bill.

Small general business customers would also see base rates increase 11.1 percent from $15.30 to $17.00 per month. The kilowatt hours charges would increase in two of the three categories. Barlow said any business customer using less than 1,300 kilowatt hours would see an increase of 1 to 2 percent per month in their bill. Most business customers in Selma use more than 1,300 kilowatt hours and could see a rate reduction as much as 0.7 percent each month.

Pre-pay customers who pay in advance for their utility services would likely see no change in their rates.

The rate tweaking – higher base rates and lower kilowatt charges – is designed to move towards actual costs of service. Without a change, revenues will fall short of actual costs by 8.3 percent by 2021.

The Council is anticipated to vote on the rate change in February with implementation in March 2017.

In neighboring Smithfield, they currently charge a $10.00 base rate for residential service and $0.1002 per kWh.  Smithfield’s small general business customers pay a $16.00 base charge and $0.0679 to $0.09 per kWh.