Posted: 1/26/06
City electric, water, garbage rates to rise 20-25 percent
By Joel Stottrup
Princeton Public Utilities Commission is increasing its electrical, water and garbage rates for residential, commercial and industrial customers by about 25 percent overall.
Residents will see the change on their bills in late February.
PUC general manager Dave Thompson said the new residential electrical rate will be just over 10 cents per kilowatt hour, compared to slightly over eight cents before the hike. The typical residential customer will see a $15.25 per month increase for their electricity, bringing their average monthly bill to $75.20, according to Thompson.
Electrical and garbage rates are increasing 25 percent and the water rates 20 percent.
The electrical rate increase is the first "substantial" hike in 19 years, according to Thompson, who said that all three rate hikes are driven by increased costs to the PUC. He said PUC commissioners have been talking for about five months about increasing the rates.
The PUC has, meanwhile, been absorbing the extra diesel fuel costs to power its generators when the PUC generating plant is used.
A large factor in the electrical rate hike is the increased wholesale cost of electricity that the Southern Municipal Power Association is charging to supply power to Princeton, Thompson notes.
Those higher wholesale rates are because of rising fuel costs (coal, natural gas and fuel oil), escalating railroad costs for transporting coal (to the generators at plants such as Becker), higher costs in distributing the wholesale power and more.
Electrical distribution costs have been pushed up by abnormal weather like the major hurricanes in the South, said Thompson.
He also mentioned higher electrical demand, constraints on the regional transmission grid, and the arrival of a new transmission system operator, as factors.
Increased fees to dump garbage at the city landfill, along with higher fuel costs, have pushed up the cost of disposing of garbage, Thompson noted.
Last, but as important, are the water costs, which Thompson said are affected by higher electrical costs, chemical treatment costs and delivery expenses.
The Minnesota Department of Natural Resources is also requiring the Princeton PUC to institute a water conservation program.
As a result, the PUC has agreed to install a progressive step-pricing schedule for water usage effective with the February bills. It means that the rates will increase with certain levels of water usage, though it will not have an adverse effect on calculating sewer rate costs.
Thompson said the PUC is not alone in raising its rates, and says PUC rates are lower than at other utilities.
Electrical rate hikes of as much as 30 percent or more have been seen on the East Coast, he said. Sometimes the utilities haven't shown their rate hikes, but have put on a surcharge of some kind, Thompson said.
Princeton Union-Eagle
P.O. Box 278
Princeton, MN 55371
Telephone: 763-389-1222
Fax: 763-389-1728