Between the lines: Rate increase slated for May bills
By Gwen Kautz, Dawson PPD General Manager
gkautz (at) dawsonpower.com
As I mentioned a couple of months ago, a rate increase would be likely for 2017. A majority of our customers will see an estimated three percent increase in energy costs and distribution service. For example, if you’re paying $27 per month for your distribution charge, it will be rounded up to $28. This increase will take place with April usage, meaning it will be billed to consumers in May.
At the December board meeting, the directors reviewed the 2017 budget including our cash reserves and health insurance costs.
The directors felt that they could not ask customers for a rate increase without asking staff for cuts to the 2017 budget. Approximately $1.5 million was cut from the original budget. An additional financial tracking system was put in place to monitor costs closely. This system will allow department managers to have more control over expenses in their areas of responsibility.
Significant discussion was held about upcoming improvements to the Dawson PPD distribution system. Each project was reviewed to determine if it could be moved to a later date. If a project was deemed to affect safety or reliability, it was prioritized. One such project planned for 2021 needed to be moved to 2017.
Like many electric distribution systems across the nation, aging infrastructure is a big concern. Director Bill Henry stated that Dawson PPD didn’t want to play catchup regarding improvements and system upgrades that are needed and should be planned accordingly.
Dawson PPD has used cash reserves to pay for expenses like aging conductor upgrades to ensure safety and reliability for the past four years. These reserves need to be replenished. By increasing the reserves, Dawson PPD will get better bond rates for large-scale improvements.
Finally, people across America have seen their health insurance premiums rise in recent years. Dawson PPD was not immune to this, either. In 2017 alone, our expenses are rising 16 percent.
We believe the scrutiny and changes we’ve put in place are sufficient to keep the impact to a minimum. We have a few rates that are still undergoing rate methodology changes so they fall in line with our current plan to ensure that they are not subsidized by other rate classes.
Please know here at Dawson PPD, our goal is to make sure we provide safe, reliable and affordable power.