COLDWATER, MI (WTVB)- The Coldwater Board of Public Utilities Board of Directors approved rate adjustment recommendations Tuesday that were made by the CBPU’s consulting firm, Utility Financial Solutions.
The CBPU has been working with U.F.S. over the past year on an electric cost of service study and financial projection to determine recommendations on current and future rate design.
CBPU Director Jeff Budd said they covered two areas.
One of the recommendations was a revenue neutral rate adjustment that would increase the fixed monthly charge, while offsetting the variable kilowatt hour energy charge.
As an example, a residential customer who used zero electricity would see an increase in their monthly charge of $2 a month. Conversely, a customer who uses an average of 600 kilowatt hours or more a month would see a decrease in their total bill as their overall energy cost would decrease. The CBPU said in a statement that this will be the first in a series of overall revenue neutral rate adjustments designed to increase the fixed monthly costs and decrease the variable costs. The net result is to bring rates closer to the actual cost of service.
Secondly, the Board adopted a recommendation to move the Power Cost Adjustment recovery period from one month to a 12 month rolling recovery period which according to utility officials will reduce the volatility impact of large peaks of power supply costs.
Overall, the consultant felt the CBPU was in a very stable and healthy financial position and was meeting or exceeding their financial targets and that the proposed adjustments will ensure the utility will maintain their financial position while making sure cost allocations are staying in line with the cost of service.
The proposed rate adjustments are scheduled to come before the Coldwater City Council February 25, 2019.
