Dalpiaz pushes to cut electrical rate
Rates for peak electrical users in Helper may soon change as the city council reviews a proposal introduced last week by Mayor Mike Dalpiaz to amend the city's electrical utilities ordinance.
The amended version would effectively lower electrical costs for several high demand electrical users within the city.
At the Nov. 16 council meeting, the mayor proposed that the city allow high demand users to consume more power before being charged demand rates.
The suggested change will only affect customers whose electrical consumption peaks between five and 10 kilowatts.
For most residential users and many businesses, the proposed change will not affect electrical costs.
Dalpiaz explained that the most common electrical consumers who make higher demands on the city's electrical infrastructure are industrial companies, where heavy equipment and welders often account for the increased electrical usage.
However, some commercial customers also use high demand, such as banks, where equipment such as vault heaters consume high amounts of electricity.
At times when a high demand user is using the most power, the customer is billed twice for power consumption.
Two separate meters measure power at these businesses.
One meter measures the total consumption of power in kilowatt hours and is identical to those found on all homes and businesses supplied with electricity.
The other meter measures the amount of electricity that is currently being used.
Companies such as Helper's electrical department use kilowatts and kilowatt-hours to determine the total amount of electricity a particular customer consumes.
Most residents use between a few hundred and a couple thousand kilowatt-hours each month.
For each kilowatt-hour residential users consume, they are billed at a certain rate.
The average rate for power in Utah is 5.69 cents per kilowatt hour.
Each electrical appliance uses a certain amount of power, measured in watts and kilowatts.
A 100-watt light bulb, for instance, uses 100 watts or 0.1 kilowatts.
In order for one 100-watt light bulb to consume one kilowatt-hour, it must be left on for 10 hours.
Other appliances use more or less power depending on the electrical requirements.
To cook a 20-pound turkey, many residents with electric ovens will use about one kilowatt continuously for about five hours or about five kilowatt-hours and would be billed about 28 cents.
For industrial and many commercial customers, the total number of kilowatt-hours used in a month is generally higher.
A portable arc welder might use about two kilowatts. A larger stationary arc welder would likely use closer to 20 kilowatts.
The more electricity a customer consumes at any given time, the more the power costs to deliver.
As electrical usage goes up, so does the wear on delivery systems.
Transmission lines, transformers and other components of electrical delivery systems require more maintenance and repair as consumption increases.
As a result, Helper's users who consume the most power are generally billed at a higher rate.
For instance, a high demand consumer with a 20-kilowatt arc welder would pay two charges for the increased usage.
One charge would be for the actual amount of electricity used.
The other charge would be for the demand. Demand charges are much higher compared to usage rates.
The current ordinance in Helper charges users $8.88 per kilowatt consumed in excess of five kilowatts.
If a Helper business uses a 20-watt arc-welder, the owner would need to pay more than $130 in demand charges in addition to the total cost of electricity.
Dalpiaz proposed adjusting the point from which demand charges are figured in the city's electrical fees .
Instead of charging for usage above five kilowatts, the mayor proposed an increase to 10 kilowatts.
For Helper's smaller industrial and commercial customers who use between five and 10 kilowatts, the change could mean a few hundred dollars each month in savings.
The suggested change is in line with other usage rates, the mayor told the council.
Rocky Mountain Power recently adjusted what it considers high demand to 15 kilowatts.
In Helper, increasing the demand cutoff to 15 kilowatts could have an adverse affect on the city's budget.
Keeping it at five kilowatts would be unfair to customers.
The mayor suggested 10 kilowatts as a compromise between keeping up with industry rates and avoiding impact to Helper's electricity revenue.
However, the council was hesitant to change just a portion of the city's utility ordinance without looking at utility rates as a whole.
The ordinance with the proposed changes also establishes rates and policies for sewer and water.
Councilmember Dean Armstrong pointed out that the $1.50 increase per sewer connection passed by the Price River Water Improvement District would need to be incorporated into the ordinance before the end of the year.
The council has yet to receive the resolution to increase rates from PRWID.
When that is received, the city can choose to either pass the increase on to users or fund the increase out of its own budget.
Further, a water rate increase was tabled earlier this year. The council has yet to vote on a proposal by Councilmember John Jones to increase water rates.
With potential changes to both sewer and water still in the works, Armstrong suggested tabling the electrical demand proposal as well.
"I think we ought to tackle the whole thing," said Armstrong. Further, the councilmember had concerns over cutting demand rates at this time.
"I'm disinclined to go cutting rates when the rest of our rates are increasing," Armstrong continued.
Still, the mayor pursued sending his proposal to a vote, noting the economic incentive created for businesses.
"We need all the business licenses we can get in this town," emphasized Dalpiaz.
The mayor said that giving businesses a break in rates would encourage new businesses to develop and create the economic growth Helper is looking for.
Still, the Helper council voted to table the mayor's proposal.
The council is expected to revisit the matter along with other utility rates, creating what Armstrong called "a total energy package."