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Rates Raised at Nome Utility Meeting

Nome Joint Utility Agenda April 2014

Nome has not changed its water and sewer rates in almost 20 years, but the Nome Joint Utility Board voted to amend that long-held tariff Tuesday.

The Board voted to increase residential rates by 12.5 percent. That could result in an estimated $121.20 per year increase for residents and a $77.52 per year increase for seniors. Commercial users could see a 17 percent hike in metered water and a removal of tiered pricing. Instead of paying less money for more water used, commercial users could pay more as water use goes up. Finally, residents who haul city water could now pay a flat rate of $40.50 per month.

Utility Manager John Handeland said Nome Joint Utility System “believes that it’s more equitable to spread this (cost) between the commercial users and the residential as opposed to a simple, across-the-board charge.”

Handeland also says the price increases are past due. Water and sewer rates have not changed since 1996. Meanwhile the cost of operation has surpassed the money NJUS takes in.

The utility system has been covering the climbing water and sewer costs with funds earned from electricity, but over the past few years, electrical demand has decreased. Handeland attributes the decline mainly to energy saving technology and to the loss of the Rock Creek Mine. Overall, Handeland predicts an eight to ten percent reduction in kilowatts sold this year, resulting in a $300,000 revenue loss for 2014.

“The rates,” Handeland said, “are no longer sufficient to sustain the utility.”

The rate hikes now go to the Nome Common Council for review.

But a change that will go into effect immediately: a jump in fuel surcharges.

Customers have been paying just over 18 cents per kilowatt since 2011. Now, they’ll pay 20.5 cents per kilowatt. For someone who uses 500 kilowatts per month, Handeland says their electric bill would increase by almost $5 for that month. That rate includes price cost equalization assistance. Without the need for City Council approval, customers can expect to see the increase on their bills this month.