As Rocky Mountain Power electricity customers in Wyoming are pushing back against the prospect of their rates increasing nearly 30%, those in the small Natrona County community of Mills also may soon see a hike in their city utility rates.
The Mills City Council is considering a proposal that updates its franchise and general utility easement agreement with Rocky Mountain Power.
It’s a scenario faced in many of Wyoming’s cities and towns, where utility customers also are charged rates and fees by municipalities on top of what they pay an electricity provider.
If passed as proposed on its third and final reading Tuesday, Mills’ new ordinance will increase the franchise fee charge on customer electric bills from 2% to 7% — a 250% increase. The agreement would last for 10 years.
Utility companies pay local governments for the right to provide electric service to city residents. The franchise fee is a percentage of Rocky Mountain Power’s gross revenues from retail sales and use of electricity within the city of Mills limits, which is collected by the business on behalf of the city.
Last spring, Rocky Mountain Power, which is owned by PacifiCorp, requested two electricity rate increases.
A smaller increase requested in April is to cover unexpected fuel costs arising from high demand during last winter’s cold snaps, and a larger hike is a net power cost adjustment because of increases in purchased power and the cost of fuel.
RMP has petitioned the Wyoming Public Service Commission for an average 21.1% base rate increase along with a temporary 7.6% cost adjustment.
The current franchise agreement between RMP and Mills is set to expire in December. The council already delayed a decision on the franchise fee increase in May.
The city’s 5% hike “ would have occurred either way, it’s just horrible timing,” Mills Mayor Leah Juarez said. “We hate that it’s at that same time.”
Juarez said her typical utility bill with the city is $65 per month and a 5% increase would amount to about $39 more per year.
She said the franchise fee increase will bring Mills in line with the 7% franchise fee rate already in place for residents of the city of Casper.
Got To Cover It
Because of inflation and other factors, Juarez said Mills has been taking on a larger financial burden than in the past and needs the higher franchise fee.
She said the RMP increase will cost Mills $4,000 per month in additional utility expenses and that the 5% extra charged to residents will help recoup some of these losses.
“We have to cover that,” she said. “No one likes when we raise fees and taxes get raised, but these things have to be funded somehow.”
Juarez said the additional franchise fees will go into the city’s general fund.
Through its agreement with the city, Rocky Mountain Power is authorized to own and install power poles and related electrical facilities on public rights of way.
According to the proposed ordinance, the new term starts once Rocky Mountain Power accepts the agreement, which must be executed within 60 days after the city of Mills passes the ordinance on third and final reading. Juarez said RMP supports the franchise fee increase.
The ordinance passed unanimously after its first two readings and Juarez said she expects it to pass again Tuesday.
Leo Wolfson can be reached at Leo@CowboyStateDaily.com.