Understanding rates

 Understanding rates

We're a customer-owned utility, and our elected City Council approves the our rates. As a municipal utility, our rates are based on the cost to provide service; there is no profit built in.

When we talk about rates, there are two different aspects: 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, such as poles, wires and pipes, are financed through base rates.

  • Cost Adjustments only apply to electric and natural gas. 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 costs adjustments, which can be made monthly, directly reflect costs that we are paying – we do not profit from increases to the adjustments.