BATAVIA – Residents could see their electric rates increase by at least 10 percent starting in May.
Batavia Public Works Director Gary Holm has told aldermen that additional revenues would be needed to account for increased purchase power costs and the depletion of rate stabilization reserves.
In 2007, the Northern Illinois Municipal Power Agency, of which Batavia is a member, agreed to a long-term power contract to purchase electricity from the Prairie State Energy Campus in downstate Illinois.
City officials said there were higher than anticipated costs related to the construction of the plant.
In addition, the city has looked at selling off some of its power because it doesn’t need as much as expected because of the economic slowdown.
At the same time, the city’s overall costs for power are up. Holm said for the period from 2010 to 2013, purchase power costs have increased a total of $7 million, or about 30 percent.
Residents would see a 10 percent rate increase in their electric bills if aldermen approve an additional half-percent home rule sales tax that could be allocated each year towards rate relief.
The one-half penny of each $1 in sales could provide up to $1.5 million in additional funds, officials said.
If aldermen decide against implementing the additional tax, then a 16 percent electric tax increase would be needed, city staff said.
In addition, staff has recommended an increase to the base rates for all customer classes.
The planned increase for residential is $4 a month.
Aldermen are set to first discuss the issue at their Feb. 18 Joint Committee of the Whole meeting.
The Institute for Energy Economics and Financial Analysis in August 2012 issued a report criticizing the Prairie State Energy Campus with charging more for power than promised.