(Danville) — Two years after mostly holding the line on utility rates, a new study is proposing moderate increases in all four utilities.
Mark Beauchamp from Utility Financial Solutions presented a report Tuesday to the Danville Utility Commission after a review of the City’s electric, gas, water and wastewater rates. He says the goal is to strike a balance between system reliability and the rates customers have to pay. “We’re trying to keep the rates close to the cost of service in all of the utilities,” Beauchamp said. “We want to minimize the impacts on customers wherever possible.”
Beauchamp is recommending a four-percent increase in electric rates, a six-percent hike in gas levies, seven-percent more for wastewater, and a five-percent boost in water rates. “Danville Utilities is not immune to the rising cost of doing business that everyone is experiencing,” said Danville City Manager Ken Larking. “That impacts our ability to provide services at the level our customers have become accustomed to.”
Larking says the increases would add up to a $10.59 monthly increase for the average customer using all four utilities. But he says the rates will remain competitive with similarly-sized cities in this region.
“The current average customer bill in Danville, as of July, is $141.50,” Larking told the Utility Commission. “Bristol, Dominion and Mecklenburg (Electric Co-Op) are lower than us, but Culpeper, Martinsville, Salem, Radford and ApCo are above us.”
Larking says Danville Utilities are supposed to be run like a business, separate from the overall city budget. “It means we expect the ratepayer to cover the cost of providing the service, we don’t subsidize it with other funds,” Larking said. “One of the reasons are rates are so competitive in the region is that we’ve had some success in securing grants to help with various projects.”
Danville Utility Director Jason Gray their goal is to have users fund 100% of a utility’s operating costs. “Each one of these utilities is an enterprise fund and they are solely dependent on the money that comes in from users. There is no tax revenue involved.”
The Utility Commission will vote on the recommendation next month. City Council will vote on the proposal as part of their annual budget process.
If adopted, the increases would go into effect next summer.