Richland residents likely will see their first increase in electricity rates in several years in 2012, but how much of an increase is yet to be determined.
Energy Services Director Bob Hammond told the city council at a workshop Tuesday that an increase is needed early next year to catch up to the cost of providing service, especially as the Bonneville Power Administration moves to a new rate scheme affecting the city.
Hammond's staff has been analyzing the cost of providing electricity to the city's homes and businesses to see how much rates need to rise.
Electricity rates in Richland haven't been increased since 2004, he told the council.
While Hammond believed residential electricity rates likely should increase about 6 percent, he wanted some policy guidance on how to handle increases for other types of users before bringing an actual proposed rate structure.
The cost of service analysis may call for increases as much as 30 percent for some classes of users, but Hammond acknowledged that kind of increase could impede economic development in the city.
Council members agreed, and seemed to be in consensus that the city should try to keep its rates competitive with other electricity providers in the region.
Hammond said the city would need some time to live with Bonneville's new rate structure before making a final decision about how to charge its own customers for power.
"We all need some experience before we enter into rate design," he said.