Sitkans should expect electric rates to rise this year, but it’s not clear yet by how much.
At a special meeting Thursday evening (4-23-15), the assembly passed two separate electric rate increases, on first reading. One would raise rates all at once, while the other would likely spread the increase over several years. Assembly members will decide which goes forward — if either — at a special meeting on Monday, May 4.
The city is raising rates to meet bond obligations stemming from the Blue Lake dam expansion.
The first proposal is an increase of about 23% — or about $28 per month — for an average Sitka household. That assumes the household uses about 1,000 kilowatt-hours of electricity each month.
That measure passed 4-2, with Tristan Guevin and Steven Eisenbeisz voting against. Mayor Mim McConnell was absent.
The second proposal would raise rates by about 6%, or $8 a month for that same household. But the city would likely have to raise rates annually for the next few years.
That measure also passed 4-2, this time with Eisenbeisz and Aaron Swanson voting no.
Deputy Mayor Matt Hunter was in the majority on both votes. He said he wanted both measures to advance to second reading, when McConnell will be back and the full Assembly can consider them together.
The smaller rate increase is possible only with an in-house financial maneuver. The city’s Southeast Alaska Economic Development fund is currently used for loans to local businesses or municipal projects. The assembly voted Thursday night to allow transfers from the fund, rather than only loans.
That would allow the assembly to move about $2.5-million into the Electric Fund, making the smaller rate hike possible.
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After the meeting, the assembly held a work session on the budget. Assembly members discussed options for funding the School District, but made no decisions.
The assembly also heard from representatives of The Ride, Sitka’s bus system. The Ride had previously asked the city for $100,000 to cover a shortfall in federal transit grants. But Connie Sipe, of the Center for Community — which runs The Ride — said the system will likely be able to tap state funding for a year longer than expected.
“I’ve been able to pull a last rabbit out of a last hat,” Sipe told KCAW.
The Ride is now asking for about $25,000 as a local match to access that state money.
UPDATED 5/1/15: An earlier version of this article stated that the Southeast Alaska Economic Development fund was set up to provide loans to local businesses. In fact, it provides loans to both the city and local businesses, even before the proposed change.
