Earlier this year a Cost of Service Study, which looks at how costs are allocated, showed that HU’s electric residential customer charge – its base rate – is too low. “A utility has costs you need to cover with your base rate, such as transmission and distribution and some maintenance, that are apart from the actual cost of the electricity we pass through our system,” explains HU General Manager Bob Sittason.
However, Sittason says, the change needed to be revenue neutral. “We are lowering the energy rate – what customers pay for the electricity they use – to offset the increase,” he says.
Effective Oct. 1, the Residential Customer Charge will increase by $2.00 per month and the energy rate will be decreased by $.00163.
HU is creating a new commercial GSA 1 customer class, breaking out a GSA 1 customer class between Single Phase service and all other services at the GSA 1 level, Sittason explains.
The Customer Charge for the new GSA 1- Single Phase customers will be $20.00, and the kWh energy rate will increase by $.00310 from the current GSA 1 energy rates.
For GSA 1- All Other customers, the Customer Charge will be $25.20, the same as the current GSA 1 rate, and the kWh energy rate will increase by $.00310.
TVA has announced a rate increase of 1.5 percent, effective October 1. HU will pass on this approved rate increase, which will add $1.50 per kWh to the average residential customer.