SIDNEY - The Sidney City Council will review two proposals addressing the monthly rates for two utilities at their first meeting of the new year Tuesday.

City Manager Ed Sadler proposes an increase to water rates and a decrease in electric rates. 

He says the water rates were restructured about three years ago to reflect actual user size as a base for the rates, and the water unit rates were left unchanged at the time.

Electric rates have been adjusted twice in four years. Sadler, who is set to retire early this year, says both rate increases were to address new transmission cost increases.

"The change in base rates for water will address the need to cover fixed costs that are not dependent on the amount of water used on a yearly basis," Sadler said in a memo to council members. "This change will still result in deficit spending for the next three years, albeit less of a deficit. After the three-year period, some debt will be paid off and the water fund will again be in the black and start building again on its cash balance." 

Under the proposed ordinance, base rates for water will go from $12 to $15 per month for residential. Rates for larger users will go from $15 to $19, $50 to $62.50, $100 to $125 and the largest user's rates will move from $200 to $250.

Along with the overall rate decreases for electricity, Sadler also proposes a restructuring of rates to better reflect actual costs incurred by the utility. He says many fixed costs are currently being funded through energy costs by having tiered rates and higher rates.

"A basic fact about our energy expenses, that I assume most people are unaware of based on how our rates our structured, is that every bit of energy we purchase is the same cost every day," Sadler said. "The new rate proposal for 'demand charges' and 'KWH' charges will be the first step in making those charges the same for everyone, in the winter or summer."

Overtime, the base rates should increase and the energy charges should go down and flatten out, according to Sadler. He expects rates to decrease an average of 5% per year.

Council is expected to take action on both ordinances at their meeting Tuesday at City Hall. The meeting begins at 6 p.m. and the public is encouraged to attend.

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