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Hope Star - Hope, AR
  • HWL rates to rise in August

  • After a sparsely attended public hearing Wednesday afternoon, the Hope Water and Light Commission adopted a long-range rate plan for water and electrical utility services that will account for capital water projects and incorporate power cost adjustments into local rates between this year and 2018.
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  • After a sparsely attended public hearing Wednesday afternoon, the Hope Water and Light Commission adopted a long-range rate plan for water and electrical utility services that will account for capital water projects and incorporate power cost adjustments into local rates between this year and 2018.
    The general impact of the new rate plan will be to increase basic electrical services rates by 3.2 percent this year, then by 5.0 percent in 2015 and another 5.0 percent in 2016, while water rates will increase by 7.5 percent per year through 2016, then by 5.0 percent in 2017 and another 5.0 percent in 2018.
    The rate changes will apply across the board for residential, commercial and wholesale customers, based upon the presentation Wednesday by Tom Gould, vice president of Bellevue, Wash.-based consulting firm HDR.
    Changes will go into effect in the first billing cycle in August for residential customers and the first billing cycle in September for wholesale/commercial customers, according to HWL General Manager Jim Kirchhoff.
    Kirchhoff said the increases are the first general rate hikes for HWL since 1985.
    Gould said the proposal HDR wrote for HWL was built around a three-step process, including a review of long term revenue requirements for the utility; analysis of the cost of services provided by HWL; and incorporating those two key features into a rate design.
    However Gould said the company specifically recommended that HWL stay with its current rate structure involving how it bills to residential and wholesale/commercial customers, since there were no significant factors that would require a complete overhaul.
    Gould said each rate study included an analysis of capital costs through the next five years, and how that will be affected by operations. The study found that HWL will need to incorporate about $2.3 million per year in capital costs into its revenue over the next five years to avoid significant new bonded debt.
    Water utility capital projects over the next five years will require about $11 million, while electrical services capital projects in the same period will require about $16.9 million, and will assume some need for bonded debt, as well, according to the proposal.
    With water revenues projected to begin to decline this year at current rates, HDR proposed increases will raise an average residential water bill of $25.37 per month to $27.27 this year; $29.32 in 2015; $31.52 in 2016; $33.09 in 2017; and, $34.75 in 2018. That represents a cumulative change per month through 2018 of $9.38 for residential rates.
    Page 2 of 2 - Basic meter charges for city residential service will increase from $6.50 currently to $8.85 in 2018, with consumption rates up to 10,000 gallons per month rise from $3.38 per thousand currently to $4.63 per thousand by 2018.
    Rural residential charges for metered service will increase from $9.75 currently to $13.40 by 2018, with up to 10,000 gallons per month rising from $5.07 per thousand to $6.94 per thousand.
    City commercial water rates increase from basic metered charges of $13 per month to $17.85 per month by 2018, and from $2.66 per thousand currently to $3.64 per thousand by 2018 for the first 10,000 gallons.
    Rural commercial water rates increase from basic metered charges of $19.50 per month to $26.70 by 2018, and from $4 per thousand currently to $5.46 per thousand by 2018 for the first 10,000 gallons.
    Residential electrical utility rates for a current average monthly bill of $59.99 per month will increase to $62.99 per month this year; then, to $66.14 per month in 2015 and $69.45 per month in 2016. That represents a cumulative change per month through 2016 of $9.46 per month on average.
    The significant change in electrical service rates will be based upon a “reset” of “power cost adjustment” charges which are the costs of power supply passed through from HWL's supplier Southwestern Electric Power Co. That change will be from a base level of 2.4537 cents per killowatt hour to 5.7371 cents per killowatt hour.
    The net effect, according to the proposal, is to lower the PCA charge reflected on customer billing, according to the proposal.
    As a result, a 1,000 kwh residential bill which currently costs $56.70 with $26.68 in PCA charges, totaling $83.38 per month changes in August to $86.05. Based upon average summer usage, a residential electric bill of $95.48 with $46.69 in PCA charges to total $142.16, increases to $146.65.
    Base charges per kwh increase from .0517 cents to .0808 cents this year, then .0848 cents in 2015 and .0891 cents in 2016 for residential usage.

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