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Batavia aldermen study ways to stabilize electric rates

Published: Tuesday, May 13, 2014 11:47 p.m. CDT • Updated: Wednesday, May 14, 2014 8:02 a.m. CDT

BATAVIA – Aldermen at Tuesday's Joint Committee of the Whole meeting recommended the city use up to an additional $2 million in electric utility reserves to keep the city's electric rates stable.

The full City Council is set to vote on the recommendation at its meeting Monday. Aldermen already have authorized the use of $2 million in surplus electric reserves for rate stabilization.

"The further use of reserves would provide additional relief during times of volatility," Batavia Finance Director Peggy Colby said in a memo to aldermen. "If the full $2 million is available and is used, then the city would have allotted $4 million of the $5 million towards rate relief. Any balance that is not used will be designated for use in a future budget."

Colby told aldermen the reserve funds will be replenished at some point, but she didn't see that happening anytime soon.

"I don't see our costs going down anytime soon," she said.

Aldermen in March voted 11-3 to approve an electric rate hike to address the electric utility's increased purchase power costs and the need for additional revenues.

The hike raises electric rates in 2014 and 2015 in combination with a half-cent increase to the city’s home-rule sales tax. In addition, the option would apply different percentage increases to energy and demand for commercial and industrial customers. City staff had recommended the option.

Batavia Public Works Director Gary Holm told aldermen the option would provide sufficient revenues and maintain comparable electric rates with surrounding utilities.

Under the option, residents this year will see a 6.5 percent increase in their electric rates, plus a $4-a-month increase to the customer charge.

In 2015, residents also will see a 6.5 percent increase in their electric rates.

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