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EPUD Studies Cost of Service and Retail Rates

August 02, 2011

EPUD is now in the final stages of a nearly seven-month cost of service analysis (COSA).  A COSA measures all the costs involved in operating the utility and then allocates these costs to each customer class in way that is fair and equitable.  EPUD has also been evaluating whether to change its current rate structure in order to help offset increasing energy costs.

“We aim to conduct a COSA every few years to make sure our rates are where they should be, and fair to all our customer classes,” said EPUD Director of Finance and Administration Tiffany Collier.  “It’s always a collaborative effort involving staff, the Citizens Advisory Committee on Rates, and the Board of Directors.”

In January, EPUD began working with a consultant to gather all the data needed to complete the COSA. Staff then began a series of meetings with the Citizens Advisory Committee on Rates to share the findings.  The committee, composed of 15 EPUD Customer-Owners, was asked to provide input on a variety of issues, including whether to adjust rates between customer classes, whether to raise the basic charge, and whether to adopt a new rate structure.

Over the course of three meetings in June and July, the committee debated these issues and attempted to reach consensus.  In each case, the committee was asked to offer its own proposals and to discuss the positives and negatives of different recommendations.  Staff provided additional analysis and feedback when requested and both parties presented their recommendations to the EPUD Board at the July 27 Board meeting.

“It was a lot of work. We did a lot of research before making recommendations because of the number of changes impacting the utility and because of the state of the economy,” said committee chair Dallas Craig. “Overall, I was impressed with the input from the whole committee and I appreciated the way staff responded to requests for more information.”

Based on all the data, the committee recommended not to adjust rates between customer classes at this time and to increase the basic charge by 20% for all customers.  This equals a $2 a month increase for residential customers. They also recommended adopting an inverted block rate structure, which would incentivize customers to conserve by charging progressively higher rates as usage levels increase.

EPUD staff will work with the Board to continue discussing these proposed recommendations. Before any changes are implemented, the Board will hold a public comment period to receive customer feedback.  The public comment period is expected to take place within the next few months.

For more information on EPUD Board meetings, or to see the minutes and presentations from the July 27 meeting, CLICK HERE

Did you know? EPUD has three Citizens Advisory Committees on Rates, Finance and Resource Planning. For more information, CLICK HERE

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