Moorhead considers water, electric rate hikes
MOORHEAD -- The Moorhead Public Service Commission will meet at 5:30 p.m. Tuesday in the City Council chambers of Moorhead City Hall for a public hearing on proposed water and electricity rate increases.
The commission is considering increasing water rates by 3 percent and electrical rates by 4 percent.
Moorhead Public Service stated in a letter sent to customers that it experienced a shortfall in water sales this year expected to total $212,000.
The drop in use included industrial and residential customers who reduced water consumption during the spring flood, the utility said.
The utility said it also needs to increase the water rate to help cover $546,000 the agency expects to spend on water main replacement in 2010.
The impact of the proposed water rate increase on an average customer using 800 cubic feet of water each month is expected to be $1.12 per month.
Moorhead Public Service said it needs to increase what it charges for electricity because the cost of energy it buys is expected to go up in 2010.
The utility said it will likely pay about $1.7 million more for power next year, largely because one of its suppliers - Western Area Power Administration - is increasing its 2010 rates by 13 percent because drought conditions in the Missouri River basin will force it to purchase wholesale power.
The utility also stated the annual transfer it pays to the city is expected to increase next year by 9 percent, or $530,000.
If the increase in the electrical rate is approved, an average residential customer using 1,000 kilowatt hours of power a month could expect to pay $3.53 more per month.
Moorhead saw its electrical rate increase 9.5 percent, 10 percent and 12 percent in 2007, 2008 and 2009, respectively.
According to Moorhead Public Service, the increases were largely due to higher prices the utility paid for its energy supplies.
In 2008, Moorhead's water rate increased 12.5 percent.
At the time, Moorhead faced a 55 percent increase in the cost of water treatment over the previous five years and had been drawing down reserves over that time period.
The 2008 water rate increase allowed Moorhead Public Service to slightly rebuild re