FRONT ROYAL - A proposed hike to utility rates that could result in a $3 monthly increase to utility bills will be the subject of a 7 p.m. Town Council public hearing tonight.
The proposed increase comes at the suggestion of GDS Associates, a third-party group that conducted a utility cost study to determine how the town could offset increased wholesale power, transmission and congestion costs.
To combat that, the proposed increase would raise charges on a 1,000-kilowatt-hour bill by about $2. Energy Services Director David Jenkins said that it would likely increase by about $3 during cold weather months. He said the average commercial property using 3,000-kilowatt hours would likely see a $30 increase. That would include a $1.50 customer charge increase.
According to previous reports, the town’s base electric rates have not changed in 10 years and the proposed increase would result in Front Royal moving from the eighth cheapest to the twelfth cheapest of 31 electric utilities in Virginia.
While certain fees will increase with the proposed new rates, Jenkins said the power cost adjustment fees would decrease. He said these are varying charges the town must include in bills to offset varying costs to purchase power.
GDS Associates also recommended that the average monthly bills continue to increase through 2021. Jenkins said if these recommendations are followed, the customer charge would increase another $1.50 by 2021. He said the 1,000-kilowatt hour bills would increase by $5 for residential properties and about $150 for commercial properties if the town follows through on the firm's recommendations.
Mayor Hollis Tharpe noted that the town does not profit off utility bills and just covers its costs.
Jenkins added the power cost adjustment would also continue decreasing through 2021. He said the town would like the increases to be implemented over several years to minimize the impact on citizens.