Tuesday Oct 26 2010
Third Roseville Electric rate increase needed, says director
By: Sena Christian, The Press Tribune
Increase of 6.2 percent is set to occur in January; will help balance utility's budget
Roseville Electric’s director thinks a third rate increase is necessary, according to a report she made to the Roseville City Council Oct. 20. Michelle Bertolino made the presentation at the request of the City Council, which had previously asked for verification that the last adjustment in a three-step rate increase is necessary so the city-operated electric utility can achieve a balanced budget in coming years. In October 2009, the City Council approved Roseville Electric’s 2010 and 2011 rates proposal for an increase of 6.2 percent each in January 2010, July 2010 and January 2011. The main goal is to balance the utility’s revenues and expenses, and restore the Rate Stabilization Fund to its minimum funding level requirements by 2014. For the last four years, the utility has dipped into savings to cover costs, Bertolino said. She said the last two rate increases have worked as intended, by allowing Roseville Electric to get back on track and start building reserves and collecting revenue to cover annual costs. All utilities in California are experiencing revenue loss, she said. Roseville Electric has made efforts to cut costs, including laying off employees, eliminating positions, reducing travel and conducting audits to identify inefficiencies. Electric utilities are required to have a Rate Stabilization Fund in place with a minimum balance of 40 percent of operating costs. Without the third rate adjustment, Roseville Electric would be well below that minimum at about 19 percent by fiscal year 2014, Bertolino said. With the increase, the local utility will be right at the minimum requirement. Bertolino said the electric utility industry is heavily impacted by a host of unknown — and constantly changing — factors, including fluctuating gas and electric prices, hydroelectric availability, legislative mandates, regulatory mandates and the economy. Having a balanced budget will help Roseville Electric respond to these unknowns should they occur. “I know it’s expensive to own your own utility,” said Councilwoman Carol Garcia. “… and with the regulatory mandates coming up, it’s not going to get any better, and we need to realize that as we move forward.” Councilman John Allard opposed the rate increases and expressed dissatisfaction with the presentation, saying he would have preferred more information. “I think a one-page staff report on a 6.2 percent rate increase is insufficient,” Allard said. Bertolino said she would come back before the council in the near future with more concrete information. She also noted that with the third increase, “we (would) still have some of the lowest rates in the state.” Mayor Gina Garbolino said electric utilities are facing tough times. “We’re talking about our utility, but this is an industry issue,” Garbolino said. “This isn’t just us. PG&E is going to be continuing to increase their rates, SMUD will, Lodi (Electric Utility) will, Truckee (Donner Public Utility District) will. This is not just something we’re doing because.” Sena Christian can be reached at firstname.lastname@example.org.