Jasper residents could experience lower electricity rates beginning in January if a new rate schedule is adopted before the end of the year.
The Utility Service Board recommended a revamp of the rate schedule after a comprehensive cost of service study revealed the utility’s cost to provide services had lowered. The study showed the utility’s cost of service is $27,615,000 compared to its current revenue of $29,256,000.
According to the Electric Commissioner Wayne Schuetter, the difference is due to several factors. The utility is purchasing electricity at a lower cost, it has dropped about 6 percent according to Schuetter. Additionally, large capital expenditures have decreased as the utility has completed projects in recent years. Those include items like the purchase of a new boom truck and the construction of a new substation.
Under the new plan, the utility will phase in the changes with customers seeing the biggest drop in their bills in the first year. The new rate structure would take effect in January so customers will see a difference in their bills in February.
According to Schuetter, the lower usage a customer has, the greater the savings will be.
Jasper has different rates for the three different customer classifications—residential, commercial and industrial. In those classifications, customers are charged two different rates according to their usage. The first rate tier is between 0 and 300 kilowatt hours (kWh) of usage and the second is everything above 300 kWh.
As the city phases in the new rate system, the two tiers will be dropped in the third year to a single rate no matter how much electricity a customer uses.
The service fee customers have will also increase from $7 to $10 in years one and two before jumping another 31 cents in year three.
Residential customers, who have the lowest usage compared to industrial and commercial customers, will see the most savings.
According to Jasper Utilities Manager Bud Hauersperger, the average residential customer uses about 1000 kilowatt hours (kWh) of electricity in each billing cycle. Under the new structure, in the first year customers will be charged 11 cents per kWh. Currently, they are charged 14.2 cents per kWh. Above 300 kWh, residential customers will be charged 8.42 cents per kWh.
In year two, residential customers will pay 9.5 cents per kWh for the first tier and 8 cents per kWh for the second tier.
In year three, residential customers will pay a single rate of 8.42 cents per kWh.
These are all base rates for the electricity and as electricity rates fluctuate, the city will apply those fluctuations to the tracker on the bills. The tracker is adjusted on a quarterly basis and if energy costs increase for the utility, the tracker will reflect that increase.
As an example, a 1000 kWh customer will pay $104.38 for the current rate structure. Under the new rate structure that customer will pay $94.95 in year one, $94.68 in year two and $94.49 in year three.
Industrial rates are set to change as well and the electric commission has plans to meet with those customers to explain those changes in the future. Hauersberger explained that these classifications will see decreases in their bills up to 3500 kWh of usage; above 3500 will likely see a little bit of an increase in cost per kWh.
If customers want to decrease their bills, they need to decrease their energy consumption through the addition of renewable energy sources like solar panels or energy-saving changes like LED lighting and high-efficiency heating and AC units.
A rate study will be completed after those three years to determine if any other changed need to be made.
“It was nice when we saw the numbers,” Schuetter said referring to the lowering cost of electricity from the Indiana Municipal Power Agency.
That lowering cost is attributed to the lower cost of production by gas power plants. “They are purchasing less from coal-powered power plants and more from gas as those come online,” Schuetter said. “As a whole, energy costs are going down.”