Roseville Electric hosting workshops on proposed rate increase
Roseville Electric public meetings
What: Public workshops on proposed electric utility rate increases
When: 2 p.m. Tuesday, Feb. 12, 6:30 p.m. Tuesday, Feb. 19, and 2:30 p.m. Thursday, Feb. 21
Where: Feb. 12 meeting at Sun City Timber Lodge, 7050 Del Webb Blvd., Feb. 19 meeting at Maidu Community Center, 1550 Maidu Drive; Feb. 21 at Riley Library, 1501 Pleasant Grove Blvd.
Two 2 percent rate increases means average monthly bills will go up by …
For residential: $2.19 in 2013, $2.12 in 2014
For small business: $3.30 in 2013, $3.38 in 2014
For medium business: $62 in 2013, $65 in 2014
For large business: $583 in 2013, $600 in 2014
For industrial: $4,508 in 2013, $4,623 in 2014
Roseville Electric customers may see a 2 percent increase on their bills this July, followed by another 2 percent jump in July 2014.
Director Michelle Bertolino says the increase is needed to cover additional costs brought on by the state’s Renewable Standard Portfolio, which requires utilities to get 33 percent of their electricity from renewable sources — such as wind, solar or geothermal — by 2020.
This mandate is being implemented in phases, with the first one requiring 20 percent renewable sources by December, which Roseville Electric has achieved, said Power Supply Manager Mike Wardell. Reaching the renewable targets adds $9 million in annual costs for the local utility provider.
“We would not be having this conversation if not for the renewable mandates,” Bertolino said.
The utility expects to bring the proposal before the Roseville City Council for a vote on March 20.
Customers experienced three rate increases of 6.2 percent each over 13 months beginning in January 2009. Back then, the utility’s revenues weren’t matching its expenses.
Roseville Electric has been conducting a rate study over the past few months, and analyzing its anticipated revenue and costs. The utility is also dealing with lower-than-expected energy sales.
“Before we look at raising rates, we look at how can we reduce costs?” Bertolino said.
Labor costs are down due to salary, compensation and staffing reductions, and the utility reduced its budget by $1 million this year. The utility also renegotiated a long-term maintenance agreement to save more than $6 million in 10 years, and refinanced some debt.
Per City Council’s direction, Roseville Electric aims to keep its reserve level at between 40 percent and 90 percent of its operating expenses, with a target of 65 percent. Bertolino said the utility won’t be able to sustain that minimum amount without a rate increase.
Electric Rates and Financial Administrator Philip McAvoy said maintaining strong reserves helps Roseville Electric keep its “very good” credit rating, which is important as this allows the utility to refinance debt at low interest rates.
Ultimately, this proposed rate increase has more to do with the significant costs of renewable sources. Nobody wants higher rates, Bertolino said, but the utility has found that local businesses prefer smaller increases more frequently, rather than one large jump.
“Our rates are still very competitive even after the 2 percent increase,” Bertolino said.
The average monthly residential bill will be $125 with the first increase, compared to $120 for SMUD customers and $179 for PG&E customers.
The utility is also planning to include two new line items on electric bills: One showing the cost of renewable energy and a second showing the cost of greenhouse-gas emission reductions.
In 2012, Roseville Electric implemented the state’s cap and-trade program, established by the Global Warming Solutions Act. The legislation, also called A.B. 32, aims to reduce greenhouse-gas emissions to 1990 levels by 2020.
Bertolino said “the jury’s still out” on the financial impact of cap-and-trade on the local utility provider.