By Greg Chandler
Zeeland Record
Nobody is really sure when the last time the Zeeland Board of Public Works raised rates for providing electricity to its customers, but it has been awhile – perhaps more than 15 years.
“It’s been a long time since the base rates were increased,” BPW General Manager Andrew Boatright said.
Boatright says raising rates now is needed to keep the electric portion of the utility sustainable.
The City Council Monday night granted preliminary approval to a proposed 1.5 percent electric rate increase, effective Jan. 1. The council also approved for first reading a 4.9 percent water rate hike, also to take effect on Jan. 1. The council is expected to give final approval to both increases at its next meeting Dec. 1.
BPW hired Utility Financial Solutions LLC, a consulting firm, earlier this year to review the utility’s cost of service and its electric rate structure. UFS has recommended BPW institute 1.5 percent rate hikes for next year as well as 2027 and 2028, although the utility is only asking for an increase for 2026 for now, Boatright said.
“We’re adjusting the power cost adjustment, which is our mechanism for passing through power supply costs,” Boatright said. “It’s a 12-month rolling average. That power supply cost adjustment has crept up over time due to the cost of power supply increasing … Part of that process is building it into the base rate.”
The utility is also planning to raise its fixed customer service charges, currently at $13 per month, to $14 per month next year.
“We’ve got some pretty significant capital improvements that have taken place … as well as (what we’re) planning for in the future, especially with regard to replacement of our generating fleet,” Boatright said.
If approved, the energy rate for BPW customers would increase from 6.36 cents per kilowatt hour to 7.94 cents per kilowatt hour, effective Jan. 1. For a typical residential customer that uses 600-700 kilowatt hours of electricity per month, the expected increase would run between $1.48 and $1.56 per month, according to a UFS report to BPW.
BPW is projecting an operating income shortfall for next year, but raising rates would help stabilize the electric utility’s operating income and cash reserves, Boatright said.
“Even with this increase, we’re among the lowest electric providers for residential providers in the state of Michigan,” Boatright said.
The proposed 4.9 percent water rate increase for next year would match the increase that took effect earlier this year. The increases address both fixed costs as well as usage rates.
For a typical residential user with a 5/8-inch meter, the monthly customer charge would increase from $11 to $12 effective Jan. 1, while the usage charge would increase from $1.66 to $1.73 per 1,000 gallons. A residential customer that uses about 8,000 gallons of water a month would see their monthly bill increase $1.56 from $24.28 to $25.84, according to a memo from UFS vice president Dawn Lund to Assistant City Manager Kevin Plockmeyer.
“Our rates are very favorable compared to our neighboring water utilities, even with this increase,” Boatright said.
Zeeland Record
Nobody is really sure when the last time the Zeeland Board of Public Works raised rates for providing electricity to its customers, but it has been awhile – perhaps more than 15 years.
“It’s been a long time since the base rates were increased,” BPW General Manager Andrew Boatright said.
Boatright says raising rates now is needed to keep the electric portion of the utility sustainable.
The City Council Monday night granted preliminary approval to a proposed 1.5 percent electric rate increase, effective Jan. 1. The council also approved for first reading a 4.9 percent water rate hike, also to take effect on Jan. 1. The council is expected to give final approval to both increases at its next meeting Dec. 1.
BPW hired Utility Financial Solutions LLC, a consulting firm, earlier this year to review the utility’s cost of service and its electric rate structure. UFS has recommended BPW institute 1.5 percent rate hikes for next year as well as 2027 and 2028, although the utility is only asking for an increase for 2026 for now, Boatright said.
“We’re adjusting the power cost adjustment, which is our mechanism for passing through power supply costs,” Boatright said. “It’s a 12-month rolling average. That power supply cost adjustment has crept up over time due to the cost of power supply increasing … Part of that process is building it into the base rate.”
The utility is also planning to raise its fixed customer service charges, currently at $13 per month, to $14 per month next year.
“We’ve got some pretty significant capital improvements that have taken place … as well as (what we’re) planning for in the future, especially with regard to replacement of our generating fleet,” Boatright said.
If approved, the energy rate for BPW customers would increase from 6.36 cents per kilowatt hour to 7.94 cents per kilowatt hour, effective Jan. 1. For a typical residential customer that uses 600-700 kilowatt hours of electricity per month, the expected increase would run between $1.48 and $1.56 per month, according to a UFS report to BPW.
BPW is projecting an operating income shortfall for next year, but raising rates would help stabilize the electric utility’s operating income and cash reserves, Boatright said.
“Even with this increase, we’re among the lowest electric providers for residential providers in the state of Michigan,” Boatright said.
The proposed 4.9 percent water rate increase for next year would match the increase that took effect earlier this year. The increases address both fixed costs as well as usage rates.
For a typical residential user with a 5/8-inch meter, the monthly customer charge would increase from $11 to $12 effective Jan. 1, while the usage charge would increase from $1.66 to $1.73 per 1,000 gallons. A residential customer that uses about 8,000 gallons of water a month would see their monthly bill increase $1.56 from $24.28 to $25.84, according to a memo from UFS vice president Dawn Lund to Assistant City Manager Kevin Plockmeyer.
“Our rates are very favorable compared to our neighboring water utilities, even with this increase,” Boatright said.
––––––––––––––––––––
Subscribe to the Legal News!
https://legalnews.com/Home/Subscription
Full access to public notices, articles, columns, archives, statistics, calendar and more
Day Pass Only $4.95!
One-County $80/year
Three-County & Full Pass also available
