A City Council majority voted on Tuesday night to approve the increase after hearing that the Bonneville Power Administration will raise its wholesale power rates by 7.5 percent on Oct. 1.
Electric rates in Ashland will go up by 4 percent on Nov. 1, costing a typical family of four an extra $4.61 each month.
A City Council majority voted on Tuesday night to approve the increase after hearing that the Bonneville Power Administration will raise its wholesale power rates by 7.5 percent on Oct. 1. The city's electric department retails electricity to customers in town and will pass on part of the wholesale rate increase.
"It certainly doesn't make me happy to raise it by 4 percent. But we're kind of in a bind because BPA raised our wholesale rate," said Councilor David Chapman, who voted with Councilors Carol Voisin, Kate Jackson and Russ Silbiger to raise the rate.
Ashland Electric Department Director Dick Wanderscheid said the city is trying to balance the financial health of the electric fund with keeping the impact on residents and businesses as small as possible.
City policy calls for the electric fund to keep reserves of $1.4 million, but the fund will dip $94,000 below that target, city staff said.
Councilor Eric Navickas joined with Councilor Greg Lemhouse in voting against the increase.
Navickas said part of the electric fund's revenues go to support general city services such as police and fire protection. He said the city is putting part of the burden of public safety on utility customers instead of on property tax payers.
Lemhouse said the city needs to find ways to cut expenses rather than increasing its revenues.
More electric rate increases are likely in the future, in part because BPA plans to move to a system where it will charge utilities significantly higher rates if they need more power than they use now.
The City Council has set a goal to increase conservation and the use of local renewable resources by 2014 in order to avoid those high charges for extra electricity use.
Although the city already has an extensive conservation program and has invested in solar power projects, it will have to boost the amount of electricity Ashland conserves and generates with renewable sources by five times current levels by 2014 to meet the council goal, according to a city staff memo to councilors.
An electric rate increase of 6 percent could be needed next fiscal year to meet the goal, the memo said.
Also Tuesday night, council majorities voted to raise transportation and storm drain fees that appear on utility bills by 3 percent each. The combined increases will go into effect Nov. 1 and will cost a typical family of four an extra 35 cents each month.
Future sewage rate increases will depend on whether Ashland voters decide to renew the city's 5 percent tax on prepared food and beverages in November. The tax helps pay for past improvements to the city's sewage treatment plant.
City staff members have warned that sewage rates may have to go up by 60 percent if the tax is not renewed.
Rate increases for water and Internet service have yet to be determined, according to the city staff memo to councilors.
Staff writer Vickie Aldous can be reached at 479-8199 or email@example.com.