On Tuesday November 25, 2014 the Owatonna Public Utilities Commission approved its 2015 budget which includes a rate increase of 1.5% for electric and no changes to water and natural gas rates. OPU has gone 3 years without a water rate increase while it has been 7 years since the last natural gas rate increase.
The electric rate increase, which will go into effect January 1, 2015, will cause an average residential customers bill to increase by approximately $1.05 per month or $12.61 per year. Rates will be approved at the December Commission meeting. Of OPU’s rate increase, 2/3 is due to forecasted wholesale electric rate increases in 2016. Although OPU’s electric supplier, Southern Minnesota Municipal Power Agency, is not raising wholesale rates in 2015, a 4% increase to wholesale rates is forecasted in 2016. The remaining 1/3 of the increase is due to the Joint Underground Project with Jaguar Communications. During this project, Jaguar Communications will be burying conduit along with their fiber optic lines throughout the town. This will allow OPU to begin moving electrical distribution wire from overhead to underground in most residential areas over the next twenty years, saving on tree trimming costs and storm hardening the electrical system in Owatonna.
“The Joint Underground project is a once in a life time opportunity for OPU to save on costs to move our electrical distribution underground. Although this has a small rate impact on our customers, we have been able to keep our rate increases modest by also reducing our controllable expenses by more than 20% over the past three years through improvements in our work processes, technology, and the efforts of all of our employees,” said OPU General Manager Mark Fritsch. “Reducing tree trimming costs is another way to keep future controllable costs down.”