The proposed rate hike on your Huntsville utility bill is due to the increased cost of materials. It is also because the Tennessee Valley Authority, who provides energy to Huntsville, plans to charge Huntsville Utilities more money for power. Those costs would trickle down to you the customer.
Right now, Huntsville Utilities is proposing to increase your fixed rate and not base it on how much electricity you use per month.
"I prefer the rates stay as they are," said customer Tyler Swegles. "Even though customers like Swegles don't want to pay more for electricity, an increase is coming. It just depends on the format."
Huntsville City Council has three options. Option one has two roughly 2% increases every other year with increases ending in 2021. Option two has less than 1% increases every year for five years. Option three is where the increase is based on usage.
"If it's something they're going to mandate one way or another then I'd rather have it increase piece by piece," said Swegles.
Your water will not be apart of this rate hike and neither will your gas bill, because both of those utilities are on different contracts, and the rates of those are controlled differently than your electricity bill. Huntsville Utilities said they prefer the option that does not change how you're billed based on how much you use here at your meter, because they said the fixed rate increases provide stability to you the customer.
"When we put more of the rate increase into the usage portion of the bill, we increase the kilowatt hours. What happens is during periods of extreme weather when cold winter mornings, hot summer days, that magnifies the impact of the bill," said the President of Huntsville Utilities Wes Kelley.
Huntsville Utilities said they need this increase to cover increased costs, such as more expensive poles and cable. They said if city council doesn't approve the rate increase, the Tennessee Valley Authority will automatically change the rates and change it based on usage where someone using a lot of electricity would get a break on their bill, and people using less would pay more.
Huntsville Utilities is not a fan of that idea, and Swegles isn't a fan of TVA making decisions for us either. "I'd rather keep it local and have our own guys take care of us," said Swegles.
The options for the rate increase will be presented to city council Thursday, and the first opportunity for a vote is on October 11th. If the council picks one the increase with start on January 1st, 2019.
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