This Sitka resident’s latest utility bill topped $800. That unseasonable spring weather is to blame is cold comfort: Utility rates in Sitka will increase 2-percent beginning this July. (KCAW file photo)
John Leach is Sitka’s municipal administrator. He’s fielded a few calls from residents concerned about unusually high utility bills.
“We haven’t had the warmest spring this year, and May was an unusually cold month,” said Leach. “And we have a rate structure set up where it’s it’s seasonal: We have a lower rate in the wintertime and a higher rate in the summertime, and that’s meant to kind of equalize out that that utility bill throughout the year. And in May, the new seasonal rates kicked in and unfortunately, it was still pretty cold, and people had to run their heaters a lot, so most are experiencing some higher-than-normal utility bills right now.”
Sitka’s electric rate for residential customers jumps from around $.13 to $.22 cents per kilowatt hour every April through September. (And these rates will increase by 2-percent beginning July 1.) The average high temperature for April in Sitka is 50-degrees; the average high for May is 54. This year in April, Sitka hit 50 only nine times. Likewise, in May the daily high temperatures reached 54 only nine times.
Overnight lows dipped into the 30s as late as May 12.
Rate payers noticed the unusually high bills, and a few inquired at City Hall to ask – with thousands of cruise tourists roaming the streets paying sales taxes – why they weren’t seeing a bit of a break. Leach says that’s because the Electric Department, like water and sewer, and garbage are “enterprise funds,” and aren’t financially connected.
“They operate like little mini businesses, and those businesses stand on the fees that people pay for the services,” he said. “ We don’t look to make a profit in any of those businesses. It’s just what do we need to keep that service up and running? Now the difference between our general fund – that’s where sales tax dollars go, that’s where property tax dollars go – those are for general governmental services like your roads, public safety or Police Department, your Fire Department. So you can kind of see how we wouldn’t want to collect fees for electricity and apply that to harbor rates, since there’s unique users in each area, or we don’t want to take electric department rates and give it to the Police Department, right? So we want to make sure that the fund stays healthy.”
Leach says that occasionally the assembly will decide to transfer a surplus in the general fund, to give rate payers a break. Last year, for example, residents all received a $300 credit on their utility bills.
Some Sitkans remain divided on the value of the major expansion of the city’s Blue Lake Hydroelectric project in 2015. At $140 million, some think it was too expensive, others wonder why it hasn’t brought down rates.
Leach says Blue Lake is holding down rates. Most residents don’t realize what they’d be paying if the project had not been built.
“The dam was necessary to increase capacity,” he said. “As more and more users came onto the system, we just couldn’t keep up anymore. And if this project hadn’t happened, then we would be running diesels and the cost of running those diesels is about $60,000 a day.”
Although warmer weather will probably spare residents from further sticker shock this summer, there is immediate relief for many people already in place. Leach says residents who qualify for any number of services, including free school lunches, food stamps, or Medicaid can apply for Sitka’s utility cost subsidization program, and receive $100 per month off their utility bills.
