No one’s tooting a horn over it, but the new year brings an increase in electric rates for Longmont companies as well as residents, starting today.
While the city is switching to a three-tiered structure for residents, business customers are already put into classes based on usage, according to Bill Ewer, spokesman for Longmont Power & Communications.
The city is raising rates — commercial and residential — an average of 5.2 percent overall. The percentage of increase varies among different commercial classes to make it equitable for every customer depending on their usage, Ewer said.
“The amount of rate increase is based entirely on what it costs for us to deliver a kilowatt hour,” he said.
For the smallest commercial customers, the average rate increase is 7.2 percent. In the past 12 months that class of business customer used an average of about 1,700 kilowatt hours per month and had an average monthly bill of $98.65, Ewer said. Under the new rate schedule, their average monthly bill becomes $106.50.
Medium-size commercial customers had average monthly consumption of about 40,000 kilowatt hours and paid an average monthly bill of $2,097. The increase pushes that average bill up to $2,198 a month. The average increase for these companies is 4.8 percent.
Longmont has only 13 users in the largest commercial group, which includes Amgen, Seagate, Xilinx, the Federal Aviation Administration facility and Longmont United Hospital. This group will see an average increase of 4.1 percent.
These customers used, on average, about 909,000 kilowatt hours a month last year and paid an average monthly bill of $42,377. Under the rate increase, their average monthly bill becomes $44,255 — an increase of $1,878.
No business has stepped up to voice concerns about the increase, according to Ewer and John Cody, president and CEO of the Longmont Area Economic Council.
“I’m not saying there’s no concerns; I just haven’t heard any,” Cody said. “Let me put it this way: The last time they did this, we did hear from some (companies).”
In 2003, the City Council voted to raise electric rates in 2004 through 2006, and rates have remained stable the past two years.
Ewer said Longmont continues to have the lowest electrical rates in Colorado, according to a July 2007 study by the Colorado Municipal Utilities Association. A new study will begin this month to find out if that still holds true, he said.
Cody, who uses the city’s low cost of power to entice companies to Longmont, said he’s not concerned about the increase.
“Companies understand costs do go up, and you also have to consider relativity,” he said.
For example, he said, American Honda Motor Co. chose Longmont for its $25 million, 61,000-square-foot data center that opened in February; Xilinx invested $16.5 million in its new data center it built in Longmont in 2008; Ongoing Operations moved into town in 2008 and has opened a data center; and Broadband Utilities is building a “spec” data center here.
“Data centers, more than anything else, are decided by the cost of electricity,” Cody said.
Longmont buys its power from Platte River Power Authority, a consortium that is owned and governed by Longmont, Loveland, Fort Collins and Estes Park.
Longmont’s wholesale cost of electricity went up 3 percent in 2008 and is going up 3.8 percent this year.
Tony Kindelspire can be reached at 303-684-5291 or tkindelspire@times-call.com.
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