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Local News

October 20, 2013

City Council to consider raising electric rates

DUNCAN — Duncan Power customers may see a rate increase on their upcoming electric bills.

The Duncan City Council will consider adopting a resolution regarding the power cost for Duncan Power customers. If approved, customers would see an increase in electric costs on their October billing statements.

While electric costs have been 3.4 cents per kilowatt hour, the proposed resolution would increase the cost at 2.2759 cents per kilowatt hour, bringing the total to 5.6759 cents per kilowatt hour.

What this means is a person who used 1,000 kilowatt hours would have spent $19.40. Beginning with the October billing cycle, that same person using 1,000 kilowatt hours would be paying $22.76, an increase of $3.36 per 1,000 kilowatt hours.

A person using 7,000 kilowatt hours can expect to pay about $159.31.

According to a memo from City Manager Jim Frieda, Duncan Power is passing off rate increases passed down to the city from its electric sources.

“These costs include PSO zoning increases of 27 percent, OG&E rate increases of 8.1 percent and significant increases in SPP (Southwest Power Pool,” according to the memo. “Also because OMPA implements their rate increases in January and our budget is developed prior to this time, we have to readjust our operations early each year to stay within a newly adopted budget.”

The memo also states Duncan Power has been faced with increasing wholesale costs during the past three years. For the first year, the power company absorbed the costs instead of passing the increases to its customers.

“When we were no longer able to offset the increase and keep the department solvent, we adjusted electric rates for all customer classes and passed on fuel cost increases,” according to the memo. “Now, due to the unpleasant fact that more cost increases being next month (SWPA) and again in January (OMPA), it is necessary to review and consider the methodology and timeliness of adjustments.

“Staff determined our costs to supply electric power consisted of three costs directly related to these increases. First is our increasing cost to purchase hydroelectric power. Second is the fuel cost that would normally be applied under our current rate schedule. The third issue is fuel transportation costs and power transportation (transmission) costs, which are increasing anywhere from 5 percent to 9 percent depending on how much hydroelectric, natural gas or coal is used in any month, and OMPA’s final decision on next year’s rates.”

The Duncan City Council is set to meet at 5:15 p.m. Tuesday in the Duncan City Council Chambers.

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