The Fayette city council on Tuesday voted 4-0 to approve an ordinance raising electric rates by 10% for residential customers and 2% for commercial customers. The new rates will go into effect on January 1, 2023, and will be reflected on customers’ February bills.

The council has discussed raising the rates ever since the results of a study of the city’s electric rates were presented to alderpersons at their regular meeting on October 11. The increase, the first in 15 years, effectively raises rates by a total of 6% across both sectors.

Residential customers realize the brunt of the increase in an effort to lessen the disparity between the two sectors. Currently, commercial customers, who already pay higher rates, effectively subsidize the residential side. 

Residential customers can expect an average increase of $7 a month, while businesses will see hikes between $50 and $75 on average.

The council is expected to pass a plan to increase electric rates annually over the next five years to keep up with the rising costs of electricity and materials. Those increases will be smaller than the one passed last week.

Danny Dougherty, the city’s public works director, said that line materials have gone up 40% across the board, and the costs for transformers have gone up 50%. For example, the cost for a pad-mounted transformer two years ago cost $3,000. The cost as of December 13 had increased to $7,200, he said.

“They don’t even want to give us quotes on poles, or pole-mounted transformers until after the first of the year,” Dougherty said. “I’m sure that’s because of the price increase and the time it takes to get them.”

Fayette Mayor Jeremy Dawson explained that the price of transformers that the city has already ordered cannot be guaranteed. “They can tell us what the price is today, but they can’t guarantee us a price when they come in,” he explained.