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| As our customers and owners, you have a voice in decisions made (including rates) via participation in public meetings and hearings. If you have input regarding any rate cases, please make plans to attend a public meeting of either City Council - our regulating authority - or the Utilities Board. When we talk about changes to rates, there are two different aspects of rates that can be affected: base rates and cost adjustments. - Base rates reflect the costs associated with producing and delivering each service to customers. Base rates pay for the operation and maintenance of power plants, water collection and distribution, wastewater treatment, and more. The physical things you see, i.e. poles, wires, pipes, are financed through the base rates. According to our charter, base rates may be reviewed and changed annually.
- Cost adjustments only apply to electric and natural gas service. Because the national markets for natural gas and electricity are volatile and uncontrollable, we use cost adjustments to compensate for increases and decreases in market prices. Natural gas cost adjustments directly reflect the costs we are paying to serve our customers with natural gas for furnaces, water heaters, ovens and so forth. Because natural gas is a source of electric production, electric cost adjustments are also affected by fluctuations in natural gas costs. Changes to the cost adjustments directly reflect costs that we are paying - we do not profit from increases to the adjustments. Starting March 1, 2005, cost adjustments may be reviewed and changed on a monthly basis.
To illustrate how much of a factor market prices have on bills: - 47 percent of a typical residential electric bill is related to external market costs
- 73 percent of a typical residential natural gas bill is related to external market costs
- Since 1998, we have had 18 increases or decreases in electric and natural gas prices - 15 of those 18 changes were cost adjustments.
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