Workers pouring cement at the Blue Lake dam in June, 2014 (KCAW photo/Rachel Waldholz)
Sitkans will likely see a major — and unexpected — increase in electric rates this year, after an unusually warm winter left the Electric Department with a deficit.
That was the message City Administrator Mark Gorman delivered to the Sitka Assembly Tuesday night (3-10-15).
Gorman said city staff will be coming forward later this month to propose “a fairly steep rate increase” — perhaps as high as 15- to 20-percent.
“And what is driving that is largely mother nature,” Gorman said. “We have had extremely warm weather and haven’t realized our fee potential and expectations to date.”
Gorman said the Electric Department is about $1-million short of projected revenue levels, and the city is rapidly eating through its rate stabilization fund.
Speaking later to KCAW, Utility Director Chris Brewton said the increase is necessary for Sitka to meet its obligations on bonds issued to fund the Blue Lake dam expansion. Sitka chose not to raise rates last fall, when it issued the final round of Blue Lake bonds. City officials hoped that with a cold winter, the Department would see enough revenue to avoid raising rates.
Instead, Alaska has been experiencing one of its warmest winters on record. Electric sales have remained essentially flat, Brewton said.
The rate increase will come before the Assembly at its next meeting, on March 24th.
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The Assembly also unanimously passed a resolution urging the state legislature to expand Medicaid. The expansion is part of President Barack Obama’s healthcare law, and Governor Bill Walker made it a centerpiece of his campaign last fall. Former Governor Sean Parnell had decided not to participate in the expansion, citing potential costs to the state.
Speaking at the start of the meeting, new Sitka Community Hospital CEO Rob Allen urged the Assembly to pass the resolution. He cited numbers compiled by the Alaska State Nursing Home and Hospital Association, for 2013.
” In that year, Sitka Community Hospital basically gave away $1.6-million in care to people that were not covered by insurance or could not afford it,” Allen said. “That was our charity care and bad debt. If we had the Medicaid expansion, their estimate is that we would have been able to recover over $400,000 of that. So it is very important to the hospital and our finances. It wouldn’t take care of all of our charity care and bad debt, but it would make a very healthy dent in it.”
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In other business, the Assembly passed, on second and final reading, an ordinance to make it easier for homeowners to add additional units to single family homes.
