Residents should prepare for future rate hikes in electric and waste water services, due mostly to rising costs and new regulatory requirements.
City staff members delivered the news about likely increases in utility bills at Tuesday night’s city council study session. Recommended rate changes for 2023 and thereafter will be broken down in more detail in August.
The planned increases should come with more information so council members and residents will better understand why Longmonters will have to pay more for lights and sewer treatment, councilors said Tuesday. There were no exact cost increases presented by city staff members Tuesday night.
“What specifically is driving up these costs?” asked Councilor Marcia Martin.
City Manager Harold Dominguez and city staff said inflation and increased competition for even more expensive material are causing most of the problems for the city.
“We used to get guaranteed prices for materials in months, now it’s in days,” Dominguez said.
Current wastewater rates have been in effect since 2020 as part of a two-year rate schedule for 2020 through 2022, according to a city staff report. The rate schedule includes a monthly service charge per account, volume charge based on billable water usage and extra surcharges for industrial customers, the report states.
A cash flow analysis for 2023-2027 shows that wastewater service revenue will not be enough to meet revenue requirements, provide adequate debt service and maintain enough reserves, the report states.
The city also is dealing with an aging wastewater system that may not be able to keep up with growth. Over the next five years, wastewater accounts will increase by an average of 50 accounts each year, the report states.
At least 8% of Longmont’s sewer lines are undersized to meet the city’s existing growth conditions, while upgrades to those sewer pipe segments to meet anticipated growth buildout will cost the city over $46 million, the report states.
Also, more stringent water quality standards enacted by the state for total inorganic nitrogen and total phosphorus call for new or modified treatment processes, the city states.
The Platte River Power Authority, which helps provide electricity to Longmont customers, is also weighing a wholesale 6.1% rate hike which will affect residents, the city staff report states.
In 2020, there was no PRPA rate change, followed by a 1.5% rate hike in 2021 and 3.2% in 2022, the staff report states. The city council approved electric rates for 2022 and 2023. During that period, the PRPA’s projected rate increase for each of those years was 3.8%, the staff report states.
An additional 2.3% increase in projected wholesale energy rate cost cannot be covered by the city’s existing electric rates approved in 2021, the report states.
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