2019 Electric Retail Rates FAQs
How much is the rate increase? The City Council approved an 8% rate increase for all customer classes at its March 19 meeting to be effective June 1, 2019. The increase is necessary due to an 8% utility rate revenue deficit determined by the latest cost of service analysis (COSA). The increase will be effective with the first utility bill customers receive in June 2019 and apply to all electrical services for the billing period.
Even with the increase, Richland Energy Services (RES) rates will remain some of the lowest in Washington. See the NW Electric Rates Comparison at ci.richland.wa.us/EnergyServices.
How will the rates affect a residential customer? For an average residential customer, the increase will be approximately $8.40 per month with the average bill projected to increase from $105.20 to $113.60. This example is for illustrative purposes. Customers’ bills will vary due to metered energy use and number of days in the billing cycle.
The residential energy charge will increase from $0.0686 per kWh to $0.0741 per kWh. The residential daily service charge will increase from $0.64 to $0.69, or from $19.20 to $20.74 per month based on a 30 day billing cycle.
Why is a rate increase necessary? The rate increase is needed due to an 8% rate revenue deficit due primarily to higher wholesale power costs. Wholesale power is RES’ most significant operating expense, comprising over 60% of expenses. In addition, RES is replacing aging, maintaining existing, and investing in new infrastructure to provide reliable service and meet customers’ growing demand for power.
Why have power costs increased? RES’ wholesale power costs are dependent on the terms of long-term power and transmission contracts with Bonneville Power Administration (BPA). BPA’s wholesale power costs have increased due to upgrades needed for aging infrastructure, improvements necessary to integrate renewable resources, decreasing customer energy consumption, lower market prices for sales of BPA’s surplus power, and increasing regulatory requirements primarily related to fish protection. In addition, a change to BPA’s financial reserve policy to provide adequate reserves when unexpected expenses occur is also likely to increase wholesale power costs.
Will you still be offering a discount for low-income seniors and disabled customers? Yes. Qualifying customers will pay no daily service charge – a $21 savings per month based on a 30 day billing cycle – and receive a 15% discount on energy.
Also, low-income customers can participate in RES’ Low-Income Energy Efficiency Program. Learn more at ci.richland.wa.us/EnergyServices.
The City has deferred, no-interest housing rehabilitation programs for low and moderate income homeowners to correct health and safety issues or improve the livability of their home by providing energy-efficiency and weatherization upgrades. Visit ci.richland.wa.us/departments/community-development-services/housing for more information.
Will there be another increase in 2020? We continue to analyze our cost of service and revenue requirements including projecting possible rate changes for several years in the future. Based on our current projections another increase likely will be necessary in 2021.
Many things affect revenue including wholesale power costs, investment in capital infrastructure, and minimum reserves to be ready for things beyond our control such as weather and customer loads. Each future increase proposed by RES staff will be discussed by the Utility Advisory Committee and considered for approval by City Council prior to taking effect. Stay informed by visiting our website and following the City on Facebook and Twitter.
What is RES doing to keep rates as low as possible in the future? Our priorities are to operate safely and provide reliable service at the lowest reasonable cost. We continue to use new technology and cost-effective business practices to minimize rate impacts to customers. We, like you, are paying higher costs for products and services including our greatest expense -- wholesale power. In addition, investing in new and maintaining the existing electrical infrastructure is necessary to continue providing the reliable service customers need.
Where can I get more information about the approved 2019 electric rates and learn how to reduce my bill? Visit www.ci.richland.wa.us/energyservices and follow the City on Facebook and Twitter to stay updated and learn ways to reduce your electric bill by being more energy efficient.
Contact us at EnergyServices@ci.richland.wa.us or (509) 942-7403 if you have questions.