Local News

Assembly advances new electric rates, auto tax

Higher electric rates in Sitka are one step closer to reality.

At its regular meeting last night, the Sitka Assembly approved a new rate structure for the city-owned utility. The measure would take one more meeting to become official.

Rates would go up for most customers, but not all. Officials hope the changes will encourage residents to conserve energy.

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There’s a joke among those who monitor Sitka’s hydropower dams. They say they operate in two seasons: Fill and spill, and drain and pray.

And for the last year, there have probably been a few appeals to a higher power to send more power. Sitka’s lake levels were below normal, and the city spent more than a million dollars to run diesel generators for extra electricity.

But utility director Christopher Brewton says lately, their prayers seem to have been answered.

“We’re actually looking pretty good,” Brewton said. “The lakes are filling up quite nicely. We’re above the rule curve in both lakes, so we are projecting spill this fall. We’re in pretty good shape.”

Still, the money spent on diesel plus the need to pay for a massive expansion of the Blue Lake Dam, got Electric Department officials thinking. Sitkans pay a relatively low rate for power – approximately 9 cents per kilowatt hour compared to 12 or higher in other parts of the region. They wanted to bring in more revenue, but they also wanted to give people a reason to save energy. The new rates, they hope, will do both.

“I was actually on the last Assembly that raised rates significantly, and that was in 1993,” said Assembly member Mike Reif, “and at that time, a gallon of oil was going for $1.10. As we know today, it’s going for $4.50, and we haven’t raised our electrical rates one cent.”

So, there’s a new structure on the way.

Residential customers who use lower amounts of electricity – say, between 250 and 1,000 kilowatt hours – will see their rates go up about $2.50 a month. Those in the middle, between 1,500 and 2,000 kilowatt hours, could see a decrease anywhere from 82 cents to $4 per kilowatt hour. And heavy residential users – people who consume 4,000 kilowatt hours or more – will see increases into the hundreds of dollars.

See the entire rate structure in this city memo (PDF file).

“Right now, it’s in the rate payers’ hands,” Assembly member Thor Christianson said. “If they want to pay less, they’ll use less. It’s a pretty good plan for right no. We’ll see next year. But this year, at least, it looks like a good plan.”

Next year, the rates could change again. Brewton acknowledged the city is looking at long-term strategies to slowly raise rates.

Nobody protested the new rates at Tuesday night’s Assembly meeting, but there were some questions. For example, as industrial users consume more energy, they’ll actually pay less per kilowatt hour.

Brewton says industrial customers are less expensive to serve than residential customers, who are more numerous and spread across the entire community. That means more wires, more poles, more infrastructure to get power out to all the homes.

Also, most of the increase in load on the system has come from residential customers, especially those who converted to electric heat when it appeared the city had power to spare. The city wants those customers in particular to watch their energy consumption.

The lakes are filling, they say, but come winter, Sitka could find itself hurting for power once more and burning diesel to make up the difference. For that reason, Assembly members like Phyllis Hackett say it’s important that homeowners conserve not only day-to-day, but look right now for long-term fixes.

“Almost every meeting since I’ve been on the Assembly we’ve been saying, in one way or another, conserve your electric, conserve your electric,” Hackett said. “It’s been over and over and over. Right now is a time to plug it again and say take a look at the different state programs and what you can do to your home to make it more efficient. We have to do that. We can only produce so much.”

The new rate structure would take one more meeting to become official. If approved, it will take effect Sept. 1.

Motor vehicle tax
Also moving forward at last night’s meeting was a plan to increase motor vehicle registration fees. The plan would add $200 every two years for the average passenger vehicle, on top of what residents already pay to register their cars. The fee would be $400 for commercial vehicles, $100 for non-commercial trailers, and $50 for motorcycles.

The increases are an attempt to raise money for road repair work, which the city says is long overdue. It would take one more meeting to become official. If passed, the fees would take effect in 2014. They are estimated to raise about $900,000 a year.

Assembly members voted 5 to 2 in favor of the plan. Mayor Cheryl Westover and Assembly member Terry Blake voted no. Westover said the fees were too steep. She recommended the city return to a sticker system, where residents must pay to have their cars inspected, and receive a sticker for their windshield. Other Assembly members said that program, which Sitka has tried before, would be too costly to administer.

A lid on the tax cap
The Assembly finalized a hike to the city’s sales tax cap it had been debating for months. Right now Sitka requires sales tax only on the first $1,000 of any purchase. But after Oct. 1, that will go up to $1,500. The measure was originally to take effect July 1, but business owners and tour guides asked for it to be put off until after this year’s visitor season. They said the original effective date would complicate reservations their clients had already made.

 

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