Decision delayed for further study

SIDNEY -- The Sidney City Council debated increases to the electricity rates before approving a rate schedule.

In the July 22 city council meeting, council met with John Krajewski of JK Energy Consulting. He said his research showed the Electricity Department would be in a $1.2 million deficit by 2030. He proposed the council consider staggered rate increases.

The decision on electricity rates was brought back before the council in Tuesday's meeting. 

Councilman Jeremy Lee asked what is the growth rate the study considered.

Assistant City Manager Josh Hanson said he researched the proposal and found different numbers.

"When we were going through the study, I initially thought it was a flat 8 percent increase for the first two years across the actual rates themselves, and then a 4 percent the last four years. After further discussion, I realized it was an overall revenue rate John had proposed. So when we break that down, and I'm just going to use the electrical service for residential rate for winter on there. When we look at customer charge per month, that would actually be 15 percent increase from $20 to $23," Hanson said.

Wednesday, Hanson said his research shows the proposed rate increases are revenue based of the entire electricity department. He said the goal is to make sure the City is not depleting the Electricity Department's reserve and possible MEAN rate increases. The goal is to keep enough reserves to address any unforeseen projects as well.

"When you look at a 15 percent increase for a meter charge. I mean that is going up $3 a month, for individuals. When we're looking at a 6.6 (percent) increase for that first 600 kilowatts, I mean, we're talking a couple cents increase per kilowatt on there. I mean there's some they may a $6 increase per just the kilowatt hour," he said.

Finance Director Kegan Carwin referenced a report on increasing interest in data centers, and electric vehicles, demand on the electric grid will also increase.

Councilman Lee motioned to look at a one-year vs two-year rate plan. The motion died for lack of a second. A second motion was made by Councilman Brett Kerkman to study a two-year plan, approved with a 3-1 vote; Lee voting against it.