Richland utility customers will see their electric bills go up beginning in January after the city council approved a rate increase Tuesday.
The monthly base charge for residential customers will go up $1.50, from $10.75 to $12.25, with the cost per kilowatt -hour also increasing. Officials say that totals an 8.9 percent increase for residential customers.
Non-residential customers will see increases ranging from 7.4 percent to 20 percent.
The hike in electrical rates is needed so the city's electric utility can meet expenses while continuing to deliver power to customers, officials said.
The rate revenues have not kept up with the cost of providing service, but officials have taken different steps over the years to defer raising rates, including spending down reserves.
"We're at a point now where our reserves are pretty much down to a minimum," Bob Hammond, the city's energy services director, told the council.
The new rate structure is expected to bring in about $5.9 million more in utility revenue.
Martha Rosenberry, who owns Perfect Image Photo Lab at the Richland Airport, told the council during the public hearing she was surprised to find out about the rate hike when she went in to pay her utility bill last month.
"It sounds to me like you've kind of made up your mind about what you want to do and how to do it," she said.
Rosenberry said it appeared her rate was going to go up 20 percent, then asked the council to consider something like a 3 percent increase during each of the next three years.
"I would ask you to please, for your small business community, take another look at this and see if you can't step into it," she said. "I don't begrudge you the rate increase at all ... just be careful how you do it."
The proposed rate increases were first presented to the council at its Sept. 18 meeting.
The council passed the second reading of the ordinance without any further discussion, making the electric rate change effective Jan. 1.
w The council reviewed the draft 2013 budget, which includes a 2.1 percent decrease to the city's $52.7 million general fund.
City Manager Cindy Johnson told the council she scrutinized every line item in the budget to create the "hold-the-line" budget that was drafted without a 1 percent property tax increase.
"We challenged every department on what they need to keep our services where they are," she said.
The city's total budget of $249.9 million is up by 0.6 percent from 2012, even though there were increases across the board, she said.
"That means we did a lot of cutting to get to that number," she said.
Johnson also said the city is beginning to feel the effects of the economic downturn. Through June of this year, sale tax revenue has dropped 16.18 percent compared to same period in 2011.
The budget does include the approved electric rate increase and an anticipated 4.5 percent increase in water rates, which is expected to be presented to the council by mid-year, she said.
A town hall meeting on the budget is set for 7 p.m. Oct. 25 at the Richland Public Library.
The council plans to take public comments on the budget at its Nov. 6 meeting, with approval of the budget expected Nov. 20.