Utility proposes 3.9% jump over 3 years
Customers of the Lansing Board of Water & Light could see a hefty rate increase in February for their residential electric and water service.
The publicly owned utility has proposed a 3.9 percent increase for the next three years on residential electric rates. In addition, it’s asking the BWL Board of Commissioners to approve a 5.5 percent rate increase for residential water service in 2018, followed by a 7.5 percent increase in both 2019 and 2020.
That’s over $65 a year for the average household in the BWL service area. There will also be increases in industrial and commercial rates as well as on steam service rates.
For East Lansing residents, that’s on top of a 5 percent surcharge added to bills last year to help the city raise an estimated $1 million to offset lost taxing value.
Delhi Township pays a 4 percent franchise fee, DeWitt Township residents pay at 3.5 percent fee, while Lansing and Meridian Township consumers of BWL services each pay a 5 percent fee. Delta, Watertown and Windsor Township consumers do not pay any franchise fees at this time.
The proposed increase is 1.5 percent higher than board officials had estimated during budgeting last year. During the battle over the Central Substation project, board officials noted they wanted to hold electric rate increases to 2.4 percent. They later explained to City Council that was a “placeholder” amount, and was not representative of any proposal.
BWL officials said the increases were necessary to fund proposed improvements for the utility.
“After three years of no rate increase, the BWL has a number of initiatives to move us to become the utility of the future,” said BWL spokeswoman Amy Adamy. “Collectively, all of these require a rate adjustment.”
Those initiatives include upgrading the city’s power distribution grid with new substations, including the Central Substation project that will consume most of Scott Park, and a new gas power generation plant. Officials have not made a decision on where the new plant will be located, Adamy said. The new plant will replace power from both the Eckert Power Station, home of the iconic three smokestacks known as Winkin’, Blinkin’ and Nod, as well as the Erickson Power Plant, in Delta Township. Both plants have come under increasing scrutiny for the amount of pollution pumped into the air. To address that, the BWL has initiated a long-term strategy to move the entire utility’s power generation into cleaner options like natural gas and renewables, including wind and solar.
Delta Township Supervisor Ken Fletcher said the proposed increases are “definitely” steep. But he noted that the utility had held off raising rates “for several years as it kind of re-built the trust with the community after the ice storm.” The BWL was sharply criticized for its handling of the late December 2013 storm.
Lansing City Council President Patricia Spitzley said she was concerned about the impact of the proposed increases on low-income residents, particularly in light of the utility’s decision not to participate in a state program that would have given those struggling to pay their bills access to money. That program would have cost the BWL ratepayers 93 cents each month.
“This does worry me a great deal,” said Spitzley. “We will need to ask the BWL about this.”