Geneva committee recommends blended energy charge

GENEVA – After more than 90 minutes of discussion at a special Committee of the Whole meeting Monday, alderpersons unanimously supported a blended energy charge that would raise enough revenue to cover the utility’s fixed costs and debt.

That means there would be one fixed energy charge for all users instead of rates based on blocks of usage, officials said.

In addition to maintaining the utility’s infrastructure, the rates also need to pay off $30 million in bonds approved to build more substations for the industrial areas on the city’s east side, officials said.

Alderpersons favored the blended energy rate as it made the increase more equal among the rate classes.

The City Council will take final action on the committee’s recommendation.

Superintendent of Electrical Services Aaron Holton and Eric Kamm of Stanley Consultants had presented information about the city’s electric rates in January and on July 3.

They followed up this week to finalize how officials wanted to proceed.

“You go away from a block rate and just say one fixed energy charge, which is another common approach that you see quite often for residential or single-phase rates or general commercial rates,” Kamm said.

“We start off at about 12 cents per kilowatt hour energy charge overall. And for every dollar increase, you are reducing your energy charge by 1,200th of a penny, basically, [a] pretty small decrease in the energy charge,” Kamm said.

With the structural change of a blended energy charge, there will be an increase in percentage for higher use customers, he said.

Lower use customers, 500 KWh and below, will see a much lower rate increase than higher use customers, Kamm said.

A kilowatt hour, kWh, is a unit of energy equal to one kilowatt of power sustained for one hour and is commonly used as a billing unit by utilities. A kilowatt, kW, is a measure of the rate of electricity used.

The customer charge – the fixed charge all residential customers pay – would go from $6.75 to $8, eventually going up to $9 and $10 under the proposed plan.