Board approves changes in electric service rates
Sallisaw's Board of City Commissioners Monday night approved a resolution that provides yearly electric rate adjustments through November 2024, beginning this November.
Funds generated from the rate adjustments will be used to fund operations and capital requirements.
According to the resolution, RP-1 residential customers currently pay a base rate of $12.91 with a charge of of $0.0897 per kilowatt hour (kwh). In November, that rate will go to a base rate of $13.68 with a $0.0951. By November 2024, that base rate will have reached $15.17 with a charge per kwh of $0.1054.
Sallisaw City Manager Keith Skelton told the board the rates will be reviewed each November until 2024 and could possibly change based on any changes made by the Grand River Dam Authority (GRDA) where the city purchases its power.
The CP-1 (small commercial) rate will be the same as the residential rate as long as the kilowatt usage does not equal or exceed 15,000 kwh. In the event the commercial business does exceed that amount of kilowatt usage in three instances of monthly kwh usage, it will be moved to CP-2, or commercial demand category, Skelton said. However, under a new rule, there is a provision to allow a CP-1 to return to that category in the event usage goes back down.
CP-2 rates are currently at a base of $9.45 with a $0.0515 charge per kwh and a demand charge of $14.96 per kilowatt. Those rates will increase in November to $10.40 base; $0.0541 per kilowatt hour and $15.46 demand rate per kilowatt. By November 2024, the CP-2 rate will have increased to a base of $12.50 with a charge per kwh of $0.0594 and a demand charge per kwh of $15.46.
Skelton said if there is any GRDA rate adjustment, the city may add a GRDA Purchased Power Surcharge to any adopted electric rate of the city.
A separate rate schedule is established for the proposed new Veteran's Center and applies only to the Center, Skelton said. According to the resolution, the monthly customer charge to the Veteran's Center will be $12.13, with an energy rate of $00.048 per kwh and a demand rate of $11.95 per kilowatt.
Skelton said those rates are part of the incentive package to get the Oklahoma Department of Veterans Affairs (ODVA) to locate the Veteran's Center in Sallisaw. That rate was approved by the ODVA and the city in October 2018.
Those rates will be in effect unless the rates of GRDA are modified between the dates of the resolution and the date of startup of the Veteran's Center. The rates, or adjustments will remain in effect for a term of 48 months from the date of startup of the center. The rate reflects a 16 percent savings from the calculated CP-2 rate schedule.
Skelton said any industrial rates are set by contract and negotiated. Presently, the city has only one industrial user, Skelton said.
Skelton said the change in electric rates had initially been scheduled back in the spring but was delayed due to the coronavirus pandemic.
The new rate structure is the result of a rate study performed with the city's electric rate consultant Jolynn Rains with the goal in mind of developing a long-term financial and electric rate plan to ensure the rates generate enough revenue to fund operations and capital requirements.
During the study, there was a review of current and future GRDA trends, review and update of current industrial rates, addressed the 15,000 kwh rule for CP-1 and CP-2 customers, review to provide an economic development rate, a rate for the new VA center and addressed distributed generation items.
The rates will be reflected in the December billing.