Huntsville City Council to vote on utility rate increase next week

HUNTSVILLE, Ala.-  You could soon be paying more on your monthly power bill. City leaders in Huntsville will decide next week on a rate increase for Huntsville Utilities.

"We know that growth is coming to Huntsville and utilities has to be ahead of that growth," Huntsville Utilities president and CEO Wes Kelley said.

Huntsville Utilities leaders had three options on the table for city leaders to consider. This week, TVA began increasing its rates by 1.5%.

"The TVA sells us approximately 300 million to 500 million kilowatt-hours each month. So if you do the math, those amounts times half a cent is roughly $1.5 million to $2.5 million," Huntsville Utilities budget and rates manager Ron Rizzardi explained.

Of the options, councilors favor an increase of customer's monthly availability fee, which is now $9.17.

"One dollar a year, each year for the next five years," Kelley said.

Right now, on average, families in Huntsville are using just under 1,200 kilowatt-hours a month.

"Fixed fees hurt low-income customers," Energy Alabama CEO Randy Buckner said. "Fixed fees discourage energy efficiency and renewable energy."

"The magic of sending an electron down a wire is nothing that Huntsville Utilities has any special sauce or special understanding about," Kelley said. "But the way in which we treat the customer and the way our policies and procedures are implemented is what we can control."

Kelley says if a new rate isn't passed, Huntsville Utilities may not be able to maintain its operating budget and its bond rating would likely suffer.

The city council will vote on one of the proposals at the October 11th meeting. The new rates would take effect on January 1, 2019.