Bountiful Power Has Regressive Rate Structure, Higher Than Rocky Mountain Power Depending On Usage

I’m playing catch-up, big time. Also, sorry for the long post title. This is a follow-up to my June post (Bountiful City Raising Your Power Rate To Maintain Politician Play Fund) I haven’t had the time to update. This has updated information (thanks to Councilwoman Kendalyn Harris and Jay Christensen, Power Dept. Accountant who also provided the new fee/rate comparison pdf).

First, per Mr. Christensen, they expect $800,000 additional revenue per year (I had estimated a minimum of $700k/year based on census numbers). Secondly, the information pamphlet the city sent out had another bit of vague information. They are not increasing the power rate, they are increasing charges, specifically the monthly customer charge is jumping from $6/month to $10/month (a 66% increase).

I like to compare rates/fees to Rocky Mountain Power (again, remember RMP has to make money to return to shareholders and has higher regulatory overhead costs than Bountiful). Number crunching time.

I looked up RMP rates. They are:

Customer charge: $6/month

8.8498 cents/kWh for the first 400 kWh
11.5429 cents/kWh next 600 kWh
14.4508 cents/kWh all additional kWh

8.8498 cents/kWh for the first 400 kWh
10.7072 cents/kWh all additional kWh

Bountiful rates are:

Customer charge $10/month
Bountiful is a flat 9.25 cents/kWh

Per the power department, the average kWh used by Bountiful residents is 850 kWh. To compare to RMP, you have to use a weighted figure:

(8.8498*400)+(11.5429*450)/850 = 10.2756 cents/kWh (11% higher than Bountiful)

(8.8498*400)+(10.7072*450)/850 = 9.8331  cents/kWh (6% higher than Bountiful)

Customer charge: Bountiful is significantly higher: 66% higher ($10/$6). Ouch.

HOWEVER, besides the significantly higher customer charge, note that if you are a low power consumer (I am), you are paying more by using Bountiful Power. If you use around 400 kWh or less, you’re looking at a ~5% higher bill plus the higher customer charge. In effect, Bountiful’s structure is a regressive structure which comparatively hits low power consumers (likely low-mid income brackets) harder than high power users.


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