FCSG Comments on Tiered Residential Electric Rates

Remarks made at City Council Meeting on November 2, 2010 

In April of this year, the Fort Collins Sustainability Group requested that council ask Fort Collins Utilities to develop a proposal for a tiered residential electric rate (also known as an “inclining block” rate) for council’s consideration. A tiered electric rate would charge residential customers the least amount per kilowatt-hour for the initial block of electricity consumed, and higher amounts per kilowatt hour as consumption increases beyond that initial block. The City Manager assured us all at that time that such a proposal would be forthcoming by the end of summer. 

We have been in contact with city staff since then, and have been told that the new rate proposal will be delayed as a result of personnel changes. According to the current six month planning calendar, this matter will not be brought forward to council until a work session scheduled for March 8th, 2011, under the heading “Electric rate options.” 

Although we understand the reasons for the six month delay, we are not pleased by it. Further, we are concerned that the work session may not be sufficiently focused on tiered rates, which can be implemented with the City’s existing metering infrastructure. We believe that if the work session gives equal weight to other rate options that can only be implemented with future “smart meters”, the adoption of a tiered electric rate will be needlessly delayed. 

According to the September 2009 report of the National Action Plan for Energy Efficiency, which was facilitated by both the U.S. Department of Energy and the Environmental Protection Agency, tiered electric rates provide the best incentive of all rates considered for customers to save energy (see http://www.epa.gov/cleanenergy/documents/suca/rate_design.pdf, page 14). Given the City’s greenhouse gas emissions reductions goals, Ft. Collins Utility’s goals for reducing electric use in its service territory, and the relative ease of implementing a tiered electric rate, we believe that it makes sense to proceed with a tiered electric rate as quickly as possible. 

The Fort Collins Sustainability Group therefore respectfully asks you, Mayor Hutchinson and members of council, to ask Fort Collins Utilities to focus the March 8th work session on tiered residential electric rates, so that Council can consider and approve such a rate in the first half of 2011.

Author: Rick Casey

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