North Little Rock Electric Department residential customers using the least and the most amounts of electricity would see increases in their monthly bills, while bills of average users would slightly decrease, according to a rate restructuring proposed Monday to the City Council.
The proposed rate changes for electric customers will be up for public comments at the council's next meeting April 23. Mayor Joe Smith said he plans on a 30-minute session before the regular council meeting, as was done Monday. The council could vote on the proposal at that meeting.
If approved, the changes will be implemented in three increments starting Oct. 1, then on the same date in 2019 and 2020.
The changes were proposed after the utility hired a consultant to analyze its rates and costs, leading staff members to develop a list of changes to request from the council.
The changes include increasing the monthly service charge, or the utility's fixed rate that is charged all customers for providing power to them. The rate charged per kilowatt hour, or for actual electricity used, would go down, according to the proposal.
"The impact of the rates are going to be felt more by people who are low consumption users and people who are very high consumption users," utility attorney Jason Carter said Monday before the council meeting. "The average user is not going to feel it that much. There's not going to be much of a change for them at all."
North Little Rock Electric Department has about 38,000 customers in North Little Rock and part of neighboring Sherwood. Inside North Little Rock, bills have already slightly risen with the added 1 percent city sales tax increase that took effect Jan. 1 that is included on electric bills. Voters approved the tax increase in an August special election.
Carter's presentation at a special meeting of the City Council outlined the proposed cost changes for residences. The figures assumed the industry standard for an "average user" as consuming 1,000 kilowatt hours per month seeing a decrease in their bills of $1.02 the first year and 93 cents the second year, then an increase of $1.78 the third year, or essentially a 17-cent reduction over the total time.
Low-end consumers, at 500 and 700 kWh per month, would see increases each year, as would the highest users, at 1,500 and 1,700 kWh monthly.
"So if you're an average customer, your bills should be a wash, basically," Carter said. "The fixed charge will go up while the energy charge goes down. If you don't use very much power, the savings isn't going to offset your monthly service charge."
For those who use higher amounts of electricity, the proposal also takes away the utility's "declining block rate" that lowers the rate charged as more electricity is used. That formula for those who use more power is outdated and not conducive to encouraging energy conservation, Carter said. Under the proposal, discounts would give way to a flat rate, he said.
"By eliminating the declining block rate, a customer won't get a discount for using more power," Carter said. "The bill you receive under the new rate will be higher."
Customers who use levelized billing shouldn't see any effect from the rate structure changes, Carter said.
"Does this mean our electric bill will be easier to read?" Council Member Charlie Hight asked about the proposed changes.
"I think that it will," Carter responded.
Carter acknowledged that the new rate structure is difficult to pinpoint how customers' bills will be specifically affected.
"I keep getting questions asking 'How much are my rates going up,' " he told the council. "My answers have been 'I don't know,' "Maybe' and 'It depends.' Those are just not good answers to those concerns."
Metro on 04/10/2018