I have been attempting to cover the use of Bountiful Light and Power as a tax cloak by the city for some time. When I read the headline, I thought I had something to celebrate. Then I read the article’s details (emphasis added):
Electrical rates for small commercial customers will be lowered, thanks to a new rate structure approved by the city council.
At first, I thought the city was actually going to lower rates for everyone and actually get rates to be comparable to Rocky Mountain Power’s (Bountiful’s residential rates are higher despite having less regulatory costs and oversight).
Currently, Bountiful is overcharging residential customers in order to maintain an, approximately, $2 million transfer into the city’s general fund.
I had never compared commercial power rates. Assuming the Standard’s figures are correct, it appears that Bountiful Light and Power rates are also higher than Rocky Mountain Power Rates:
The rate structure for small customers will be lowered to a $6.80 monthly charge, down from the charge of $25. As part of the new price structure the first 15 KW of demand would be included in the energy KW hour component of the rate. The remaining 15 to 30 KW would be billed at a rate of $7.82 per KW, which is a reduction from the current charge of $12.50…
…The new rate structure includes a two-tier component with a break point at 1,500 kilowatt hours. The first 1,500 kilowatt hours will be billed at $0.1059 per KWh and everything over 1,500 KWh will be billed at $0.0594 per KWh. The existing rate bills all commercial customers at $0.045 per kilowatt hour for all energy they use.
Rocky Mountain charges their small customers less, and, depending on the plan (small commerial users can pick from two rate structures), quite a bit less. The two schedules (23 and 23B) are available at their website or here (pdf): Schedule 23 and Schedule 23B. The rates appear to have been way higher before the city council action – no wonder Bountiful’s small commercial users complained.
The city claims it will take a $200K hit from doing this. That seems like spin when the city manages to generate a surplus (overcharge) to push into city coffers. It will be interesting to see if the city will bump residential and/or other rates to recoup the $200K. Doing so would, effectively, indicate that the city is also using rates to subsidize certain users.
As the city’s rates are higher than RMP’s, one wonders if they are not also overcharging commercial users to maintain their transfer to the general fund.