Roseville power rate increase first in 7 years

The Roseville City Council voted Wednesday for the first electric rate increase in seven years. After exhaustive public outreach, the council approved the rate increase. Roseville Electric Utility's 2021 cost-of-service analysis concluded that expected revenues will not cover expected costs from 2023 through 2025. As a result, the utility recommends an electric rate increase for all customer classes, officials said. The rate increase will mean $8.1 million in new revenue a year after the two-year phased launch to 65,000 Roseville Electric customers. In the two-year, two-part increase beginning in January, regular residents will see a 2-percent hike in 2022 and again in 2023. Small commercial, large commercial and industrial customers will see the same 2-percent increase, while "medium" commercial properties get a similar 1.5-percent increase each year. In addition, the monthly resident customer basic service charge will increase $2 each of the next two years. Small commercial customers will see a $3 basic monthly hike, large commercial customers a $20 monthly charge, and large industrial customers rise $25. Medium commercial customers have no rate hike, officials said. Council members applauded staff for working to keep Roseville's utilities some of the lowest in the state with infrequent hikes. Officials said the utility has worked hard to ease cost increases and operate the utility as efficiently as possible. Actions taken include a robust, visionary energy procurement program, refinancing and paying down debt, careful management of position vacancies, and most importantly, establishing a culture of cost discipline. "These actions have all helped the electric utility avoid electric rate increases since 2014," the staff report read. "Nobody likes to raise rates. Our hands are kind of tied on this," said District 1 Council Member Tracy Mendonsa, who added that Roseville stands out as a city with its own utility. "That makes us pretty unique in the region. We have all the burdens of a utility." Council member Scott Alvord had similar sentiments. "We really shine compared to our neighbors and shine even with a rate increase," Alvord said. Throughout the public outreach, officials said, customer feedback was very positive and complimentary of Roseville Electric Utility's reliability and service levels. There were no substantive concerns expressed by residents or the business community, according to the report. In a related consent agenda action, Roseville City Council also approved a 10-year, third phase, $4 million-a-year power purchase agreement with Northern California Power Agency and the South Feather Water and Power Authority. The agreement provides Roseville no less than a 16.5 percent (20MW) share from four existing hydroelectric powerhouses. Funds are available in the 2021-22 electric budget and ongoing funds will be requested in future year budgets. New wells In other business, City Council approved a $16-million contract with Auburn Builders Co. to finish two new aquifer wells in west Roseville. Besides pumping water out of the wells to drink, water is pumped into them for drought storage, officials said. In 2019, the city initiated a project to expand the existing Aquifer Storage and Recovery Well Program. The preliminary design was completed for the initial set of two well sites, Westbrook and Solaire in the Westpark area of Roseville. The downhole wells have been previously drilled by developers but finishing the above-ground work for mechanical, electrical and instrumentation is needed to complete them. Selecting these two sites where the "below ground" installation is already completed gives the most viable option for two new wells online as soon as possible, officials said. Roseville currently has six wells and officials want 12 wells total, officials said. One Roseville well drilled in the 1960s has reached the end of its operational life and must also be replaced, said principal engineer George Hanson. Utility staff is expediting the project as part of a select group of capital projects focused on alternate sources besides "surface" water from Folsom Lake. The wells help ease impacts of another potential dry year, officials said. Staff said that the Governor's Drought Emergency Proclamation of May 10 allows suspension of certain competitive bid and procurement requirements to expedite drought-related projects. The city attorney said this well agreement meets the criteria of "sole-sourcing." City Council also approved a budget adjustment of $7,750,000 from the Water Construction Fund. Costs include Design-Assist Construction ($15,977,830), City staff time ($150,000), City Wastewater Regional Connection Fees (initial estimate of $1,000,000), Roseville Electric Backbone Fee ($120,000) and additional hardware ($38,000). These additional funds will bring the project's currently available budget to $17,366,240 and the total project budget to $17,750,000, officials said. Vice-Mayor Bruce Houdesheldt asked about noise impacts. Hanson said similar wells in the city of Livingston reported no complaints of operational noise from nearby residents. New neighborhoods The council also approved the final maps for two new neighborhoods, Federico Phase 2 Village and Sierra Vista KT-1B. The Federico map will create 74 new residential lots, with Sierra Vista adding 93 residential lots and three public landscape parcels. Neither action has a fiscal impact on the city, officials said.