Fayette Alderpersons are expected to decide on electric rate hikes at their next meeting on Tuesday, November 8. 

The city council on October 11 learned the results of an electric rate study, which suggested the city increase residential electric rates by 10%. Commercial rates, which are already higher than residential rates, could go up by 3.2 percent. The two combined would mean a 6% total increase.

Commercial customers’ higher rates effectively subsidize the electric service’s residential side.

Those figures were presented to the council on October 11 by Craig Woycheese from Toth & Associates, the company hired by the city for the electric rate study. Last week, the council asked for other scenarios with lower residential hikes and higher increases to commercial rates to achieve the 6% raise.

The last time the city raised electric rates was in 2007.

“We’ve [had] one to two percent inflation since 2007, and we haven’t made a change,” said Mayor Jeremy Dawson. “Now we’re facing eight to 13 percent inflation for the year. We have a change staring us straight in the face.”

Supply costs are increasing as well. Line materials have increased by around 40%.

“Certainly, a rate increase of some kind is necessary,” agreed Southwest Ward Alderman Grafton Cook. “We’re looking at the condition of our electric grid and the probability of having to make major investments in the improvement of the grid in the foreseeable future. There’s no way we’re going to be able to get around it.”

It is possible that the council could not only vote to increase rates this year but could build in future yearly hikes that are tied to the rate of inflation.

Mayor Dawson told council members that a decision will need to be made at the board’s next meeting. Should the council vote to increase rates, the city must hold two public hearings on the matter before the increase could go into effect.

The city council meets regularly at 6 p.m. at City Hall on the second and fourth Tuesdays of every month. Meetings are open, and the public is invited.