Electric rate increases appropriate to eliminate deficit
The Naperville Sun article of March 23 discussed the proposed electric utility rate adjustments for the next two years, needed to address a $14 million operational deficit.
It is obvious from the article that both the City Council and the Public Utilities Advisory Board (PUAB) are sensitive to raising rates due to several unexpected, but valid, cost-increasing events. However, there is apparently a difference of opinion between the two groups as to how soon the deficit would be eliminated and, thus, to what degree increases would be needed both this May 1 and in May, 2015. That is, how long the utility should be allowed to operate in the red before revenues equal expenses.
Residents would observe a several dollar per month increase from their current electric bills depending on which of two scenarios is decided on as the solution to the deficit problem. Even though the electric utility has very competitive rates now and the best reliability record in northern Illinois, it is never a good idea to raise rates more than absolutely necessary. Yet, operating at a deficit longer than necessary is, likewise, unacceptable.
This considering that the causes for the multi-million electric operating budget shortfall (power generation construction costs, weather factors and even usage patterns) have been well documented and explained to the residents in detail.
The PUAB Chairman, John Krummen, has stated that he does not feel it is appropriate to continue to run a business with a negative cash flow and I tend to agree. It seems to me that the longer we wait to put ourselves back on course, the more it will cost us ultimately. That is, within reason, the sooner we correct our revenue/expense forecast and eliminate the deficit the better.
The question now, it seems to me, is not if we need to adjust rates, but simply by what amount and when? As an electric rate-payer myself, I say let’s adjust rates reasonably, do it as soon as financially possible to eliminate the deficit, and continue the operation in the black going forward.