City council to vote next week on proposed Huntsville Utilities rate hike

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HUNTSVILLE, Ala. (WHNT)– This time next week, we should find out if Huntsville Utilities will be able to raise rates in two proposed increases.

The utility company has proposed a $2.50 increase on the fixed monthly availability charges for residents. There is also a separate increase of $1.59 for “small commercial” users. All that would be effective May 1, if approved. It’s estimated to bring in more than $4.9 million to Huntsville Utilities.

A second rate hike could happen October 1. This one would be a $2.40 increase on the fixed monthly availability charges for residents, with a separate increase of $2.40 for “small commercial” users. It’s estimated to bring in more than $4.9 million to Huntsville Utilities also.

This would affect all the customers who are residential and small commercial users, not just those who are within the city limits of Huntsville.

Huntsville Utilities leaders said the last local rate increase happened in October of 2011, arguing that this is necessary for them to continue to grow and serve their growing customer base, while also improving services.

“Our cost is going up, but customer costs are not going up as much because they’re using LED lights and being more efficient,” said Jay Stowe, CEO of Huntsville Utilities, at a Huntsville City Council work session. “It causes a separation.” He said customers are changing behavior in a way that reduces their load factor, but the company still has expenses. Stowe said there’s been a 1.5% growth in their customer base, but only a 0.5% usage growth.

He said there are some other reasons they’re asking for the increases, too. This includes significant capital expenses they’ve taken on for projects like Advance Metering Infrastructure, construction, and outage management.

Some came to the meeting wanting to know what could be done to help those who find these bills hard enough to pay as the rates are now.

“I don’t see why you all are wanting to increase,” one woman commented. “All this pressure is on those wondering, ‘How am I going to get the money to pay this?'”

It was a hard sell to council members, too.

“Isn’t that a pretty big impact on those low-income people who are hurting?” asked Councilman Bill Kling.

“I was elected to represent the wishes of my constituents, and that’s what I’m going to do on this,” said Councilman Richard Showers. “I have not had one call from someone that was for this. They’ve all been opposed.”

The Huntsville City Council votes next week after a public hearing on the issue.  Some council members told us after hearing the proposal tonight, it will be hard to vote for the rate hike, even if it’s just a few dollars.

Stowe said it’s always hard to talk about rate increases, and they don’t like to ask for them. He commented that Huntsville Utilities is trying to keep the increase as low as they can, and they’re still keeping costs lower than other companies who offer similar utilities in north Alabama.

“We think that it’s reasonable, fair, thoughtful and careful,” he said, “Even though that does not mean it’s not going to hurt somebody and people and we feel for that. But there’s a balance we have to do.”