ESCANABA, Mich. (WZMQ) – City of Escanaba residents will soon see some increases on their utility bills.
On Monday, City Council approved several utility rate increases, including an electric rate increase of 2.75%.
“Basically, we need to maintain the utility and keep the lights on,” said City Electric Utility Director Gerald Pirkola. “We evaluate it every year, and previous years has been I think 1.75% per year. It’s a little more than the previous years, but it’s still, in my opinion, a low increase.”
Even with the increase, Pirkola says Escanaba’s rates are among the lowest in the area. He cites rising costs of the city’s power purchase and renewable energy certificates [REC] as reasons for this year’s higher rate.
“A renewable energy certificate [REC] is basically one megawatt hour of energy that was generated,” Pirkola said. “Our solar facility generates about 2,000 RECs each year. We have to retire 20,000 every year.”
To reach that 20,000, the Electric Department has to purchase approximately 18,000 RECs per year. Pirkola says the RECs are not a “significant” portion of the department’s costs. However, he anticipates certificate costs will continue to rise in the coming years.
Residents will also see a 4% wastewater increase, coinciding with collection system work, and a planned 8% water increase. Water and Wastewater Superintendent Jeff Lampi says the water increase is largely due to upcoming system needs and a major project at the plant.
“This project was necessary because the clear well is old,” he said. “It hadn’t been looked at for a long time and it didn’t have a redundancy system. We had to take the plant down. Now we have a complete, redundant tank and nobody in the city even knew we did any work, which is really nice.”
The total cost of the project is about $12 million, roughly 70% of which was driven by grants or loan forgiveness according to Lampi. With Esccanaba receiving more in grant funding than other similarly-sized Michigan cities, officials say these rate increases should eliminate the need for larger ones in the future.
“In years past, there were very few,” said Lampi. “We went several years with 30% – 35% that got us into a place where we can work with some capital. Hopefully we can stick to the 5% – 8% for the next coming years to keep up with our pace of work.”
“Looking at where our rates are against other communities, we’re kind of right in the middle of the pack,” City Manager Jim McNeil said. “…It’s a tough pill to swallow, but it really is reflective of what we’re dealing with. Hopefully, if we can pull off everything that we’re hoping to, long-term, we could have some of the lowest rates in the U.P. for a long time if we can put our money to work today.”
The City’s solid waste, recycling, yard waste, and litter rate will not increase.
