Longmont city council adopts new electric rates

The Longmont City Council adopted a new electric rate schedule that will span two years — 2024-2025 — on Tuesday night.

According to city staff, an increase in electric rates depended on several factors. The city conducted a comparative review of the revenue generated by current rates compared to projected revenue needs. The determination was that electric rates would need to increase in order to meet projected demands.

Another contributing factor is the 5% increase implemented by Platte River Power Authority to address the mutual renewable energy goals and new infrastructure. 

Inflation also contributed to the decision to increase rates, according to city staff. Higher contractor, labor, equipment and materials costs resulted in operating expenses to increase to $2.3 million in 2024 and $1.1 million in 2025. 

Capital improvements are another contributing factor. The city anticipates that these expenses will increase by $2 million in 2024 and $865,000 in 2025. These increases are not only due to inflation but to proactively replacing aging infrastructure such as distribution lines and substation transformers, according to the city.

If the current rates were held it would create a potential $7.8 million deficit in 2024 and nearly $10 million in 2025.

The service charge for electric rates will remain unchanged, according to the city, however, energy usage and demand charges will be adjusted by 6.8% each year. 

Councilmember Tim Waters verified with city staff that Longmont will continue to have the third lowest utility rates among municipalities along the Front Range. Waters also asked staff why Longmont’s rates are so low. City staff stated that rates remain low in Longmont due to the dedication of the city and its residents to fund the investments in the system.