Following a three-year amnesty on electricity rates – with increases limited to 2 percent annually through 2015 – residents and businesses in Naperville, Illinois, will have to dig deeper to pay their bills, effective February 1.
City Council members voted on January 5 to boost rates by 8.3 percent this year for residential, commercial and industrial customers; with smaller increases to kick in on January 1, 2017, and January 1, 2018.
The increases are badly needed in this municipality, which optimistically started a major smart grid initiative in 2012 with $11 million in matching funds under the U.S. Department of Energy’s American Recovery and Reinvestment Act. Today, inaccurate cost projections, overruns at the city’s power plant, and a $13.2 million loan from the city’s water utility have left the electric utility $44.3 million in debt, according to local broadcaster NCTV17.
Increases on January 1, 2017 and January 1, 2018 will depend on whether a customer has a residential, commercial or industrial electric account. For residential accounts, the increases will be 3.6 percent in each of those two years.
Small commercial customers also will pay 8.3 percent more in 2016; but will pay lesser increases of 3.7 percent and 3.6 percent for the next two years respectively.
Industrial customers will start off at the 8.3 percent rate this year and then go on to pay 0.8 percent more in each of the following two years.
In addition, electric bills will come with a Purchased Power Adjustment (PPA), which, according to the Chicago Daily Herald, will change the price every month based on a six-month rolling average of whether the city’s cost of providing electricity was above or below a base rate.
And part of the power cost will shift to the fixed “customer charge” portion of the bill each year to provide a stable revenue source for fixed utility costs in the following amounts:
- Residential: $1.50 per month per year
- Commercial and industrial: $3.00 per month per year
In recommending changes to the rates, the utility staff said they considered “many factors in the rate alternatives provided to the council for its consideration, including compliance with city financial policies, limiting debt, and fully funding capital through rates and competitiveness in the residential and commercial marketplace.