Citizens of Alta will see an increase of approximately 10 percent in rates for electricity on their utility bills beginning on May 15
As the city will raise electric fares for the first time in three years to offset higher power purchase prices and the reduction in the amount of cheap energy it can obtain from a large hydroelectric power company.
Ron Chapman, the superintendent of Altatec Utilities, said a resident which uses about 1,200 kilowatts (kwh) of electricity per month would pay about $6 more on their monthly bill on average. The 1,200 kwh figure would reflect the amount of energy used by a typical family of four with a three-bedroom house.
Chapman said there were several reasons for the rate increase, including a jump in overall prices for electricity.
"The rates haven't gone up here in town since 1999, and the cost of everything has gone up since that time," Chapman said. "That includes the cost of purchasing power, and we're trying to compensate for that."
A second reason for the electric rate increase is the loss of 4 percent of cheap energy the city obtains from the Western Area Power Administration (WAPA), a federal system which markets and transmits cost-based hydroelectric power to consumers in 15 states, including Iowa, South Dakota, Nebraska and Minnesota.
Operated by the Bureau of Reclamation and the U.S. Army Corps of Engineers, WAPA was told by legislators that it needed to disperse its power supply over a wider area, leaving towns across the country currently receiving hydroelectric power from the company with a 4 percent reduction in their allotment of WAPA-based energy.
"WAPA is by far the cheapest energy that we purchase," Chapman said. "When we lost four percent of that cheap energy, we had to replace it with higher cost energy from sources other than WAPA, and that didn't help matters at all."
Chapman said a third reason for the rise in electric fares is related to the status of the city's overall supply of electricity.
Current low-growth projections show the town will have an energy deficiency by 2005 or 2006, and Chapman said it will need to make arrangements now to prevent that from happening. That could include an investment in a base-loaded power generation system.
A flat monthly fee will also be implemented in order to protect against costs Altatec would suffer if federal deregulation of energy takes place.
Potential deregulation would allow customers to purchase electricity elsewhere, but residents would still use the city's transformers, lines and meters, which would still have to be maintained by Altatec.
Residential patrons will pay a $9 flat fee per month, and will then be charged 6.3 cents per khw for the first 600 kilowatts they use. They will then pay 3.5 cents per kilowatts beyond the first 600.
Commercial clients with single-phase service will pay $11 per month, and those with three-phase service, which use a minimum of two transformers and require more maintenance, will pay a flat rate of $13.50 per month. Customers of both commercial services will also pay 7.5 cents per kwh of usage.
Churches in town will pay the three-phase service rate, as Chapman said those buildings use that type of electrical infrastructure.
Special metering for electric heat, water heaters and clothes will begin with a $6 flat fee, plus five cents per kwh for the first 150 kilowatts and 3.5 cents beyond the first 150.
The previous residential rate for citizens of Alta was $8 for the first 50 kilowatts, 5.67 cents for the next 550 kwh and 3.5 cents per kilowatt after that.