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  • Nephi City adopts rate changes for three utilities

By Myrna Trauntvein
Times-News Correspondent

Rate changes for three utilities owned by Nephi were adopted at council meeting on Tuesday.

A fourth proposal was tabled because the rate increases to be charged by JRDA (Juab Rural Development Agency) landfill have not yet been established.

When Justin Seely, mayor pro tempore, entertained a motion and second and called for a vote, all voted in favor of the changes in rates reflected in the master fee schedule except for Nathan Memmott, council member, who voted against adoption of the rate changes.

The fee proposed as an increase for the natural gas rate schedule was the non-subdivision and subdivision natural gas connections.

“Current costs exceed the current charges,” said Seth Atkinson, city administrator. “The proposed change updates the fee to cover all costs for the natural gas connections.”

“Natural gas is the most healthy utility fund that we have,” said Memmott.

He suggested that the council not raise the rates for that utility.

“We want to keep it healthy,” said Kent Jones, council member.

Larry Ostler, council member, said it was a proven fact that the costs of the utility were no longer covered and that the city was not making money.

Memmott also questioned the fee of $500 for a new connection.

Atkinson said that the city was shelling out $2 million for a redundant gas line. When the city began to see those expenses it might be that the money collected would no longer be enough.

“Currently, the rate payers are subsidizing those building,” he said.

“Every new connection is being paid by every rate payer,” said Steve Jones, resident.

In the work session on April 9, the city council examined the options for changes in some utility rates.

“The first rate that was examined was from the Electric Fund,” said Atkinson.

Due to fluctuations in wholesale pricing, the costs of providing electric service have sometimes exceeded collected revenues.

“Many cities, including those in the UMPA (Utah Municipal Power Agency) group, have instituted something called a ‘power cost adjustment’ or PCA,” said Atkinson. “This is basically a premium charge instituted on the wholesale charge for power.”

The PCA would contain an operating and capital component.

The operating component would be enough to fund personnel, materials, debt service and smaller capital projects.

“The capital component would consist of enough funding for larger capital projects such as line extensions, new or replacement substation equipment and vehicles,” said Atkinson.

He said that city staff was proposing instituting a PCA on the electrical rates.

“In addition, since rates have not been updated since 2014,” said Atkinson, “the staff is also recommending an update to the customer and energy charges as well as a structural change to the tiered system on the commercial combination rate.”

These changes will help the electric fund weather the fluctuating wholesale market rates as well as provide customers with an opportunity to feel the impact of decreasing wholesale rates, similar to the Natural Gas fund.

Another rate that was discussed at the April 9 work session was the city’s sewer rate, he said.

“This rate has not seen changes in decades,” said Atkinson. “There are several upcoming capital needs that will need to be addressed and a change in the sewer rate will assist the city in meeting those needs.”

Some of those capital needs are: 1) Pipe replacement or new pipe lining on aging or damaged sewer lines, 2) Planning for a fourth sewer pond, 3) Savings for a vac truck replacement.

“The update in the sewer rate will help to correct some of these capital needs,” said Atkinson.

There will be an increase of $1.20 on the base rate.

With regard to the water fund, the volume charges for industrial users was not included as part of the increase that was instituted last year.

The staff is proposing a modest increase in the industrial rates.

“These increases will continue to assist the water fund with the infrastructure upgrade project that is occurring at this time,” said Atkinson.

The council had discussed a possible change in the stock watering rate in earlier meetings.

The conclusion of the council was to observe the metered water for a time before determining on setting a rate or making improvements to accept a credit card.

“The standpipe is now metered so that information is now being obtained,” said Atkinson.

At an earlier council work session, the council provided direction to the staff to include any changes to landfill rates that may be enacted by the Juab Rural Development Agency (JRDA).

“In addition, there has been a small increase proposed to cover the cost of mulch pile expenses now that those costs are no longer being covered by JRDA,” he said.

However, he said, the council should not act on any rate increase for customers until the final rates that are still to be enacted by JRDA are approved.

“The master fee resolution incorporates each of the proposed rate changes and the staff recommends adoption of Resolution 05-07-2019 after review by the city council,” he said.

Several electric rates were set. Of general interest is the one for residential users. Electric rate 1 is for residential customers requesting electric service at 120 volts, 120/240 volts, or 120/208 volts (network). The monthly charges: Customer Service Charge: $7 Energy Charge: $0.0885/ KWH.

This rate is subject to a monthly Power Cost Adjustment (PCA).

The resolution for the purpose of establishing and setting forth a general schedule of the most common fees charged by Nephi City was adopted by council members.

General Fee Schedule was adopted and enacted as of May 1, 2019.

All fees and charges not listed in the resolution which are contained in any current resolutions will remain in full force and effect.

This Resolution is to be construed to be consistent with any and all State, County and Federal laws and regulations concerning the subject matter hereof. If any section, sentence, clause or phrase of this Resolution is held invalid by any court of competent jurisdiction, then said ruling shall not affect the validity of the remaining portions.