Explaining its vote as being strictly a business decision, the North Little Rock City Council approved Monday a restructuring of city Electric Department rates charged to the utility's customers.
The restructuring isn't a flat increase, but it will increase the fixed rate that the city charges all of its utility customers while lowering the amount charged for the amount of power that customers use.
The net result for "average" electricity users will be a slight reduction at the end of a three-year implementation period, utility officials have said. The first changes will take effect Oct. 1.
The North Little Rock Electric Department has about 38,000 customers in North Little Rock and in part of Sherwood.
Council members voted 6-1 for the proposal. Council member Linda Robinson voted against it. Council member Maurice Taylor was absent.
The restructuring is meant to help the city-owned utility remain financially stable and provide reliable power to its customers, city and utility officials have said. The utility wants to be able to maintain its cash reserves and its current distribution system, complete capital improvement projects needed in the future and retain the ability to respond to emergencies, all without having to borrow money, officials have said.
"This is a company, and we happen to own the company," Mayor Joe Smith said of the business aspect of having a municipal utility.
Council member Debi Ross, formerly part of a family-owned restaurant business, said she understands why business owners fret about an increase in costs, recalling how hard it was in her family's business to keep customer costs low when the business expenses would increase, sometimes without notice.
"We have to cover our bills and we have to cover our service to customers," she said.
Ross also countered a couple of comments Monday that questioned an electric increase coming so soon after a 1 percentage-point increase in the city sales tax took effect Jan. 1. The Electric Department has a separate budget from the city's general fund that pays for city operations and services, Ross explained.
"The Electric Department isn't funded by that sales tax or by the general fund," she said. "This is not any kind of tax restructuring."
One of the major changes in the way the utility will charge users is removing a discount for higher volumes of power used. The discount, known as a declining block rate, is environmentally unfriendly because it lowers the charged rate as more power is used, encouraging higher use of electricity, utility attorney Jason Carter has said. Those customers will be charged a levelized rate under a new system that will also make bills easier to understand, Carter said last week.
After 15 residents and small-business owners spoke in a public hearing during the council's meeting three weeks ago, only six addressed the City Council on Monday, expressing more understanding of the need for the rate restructuring. The only actual concern was about how any increase in costs is more detrimental to low-income residents and those on fixed incomes.
"I personally can't afford an increase," said Phyllis Hodges, owner of the Carousel wellness center in the city's downtown. Hodges told the council at its previous meeting that the increase could hurt several of her customers, effectively hurting her business as well.
"Give us more time," Hodges said. "Feel what we're dealing with."
Metro on 05/15/2018