After the City of Seward twice voted not to sell its electricity services to Homer Electric Association, the city council on Dec. 18 passed a resolution to increase Seward Electric rates by $0.06 per kilowatt hour, which works out to a rough average of $36 more per month for its members.
A rate study conducted earlier this year suggested the $0.06 kWh increase in the event that the vote to sell Seward Electric failed in 2023. The vote did fail, twice, once during a special election in May, then again during the regular elections in October.
The rate increase will in part go toward the $10 million debt Seward took on to replace transmission lines, and in part to the refurbishment of three substations which all have outdated equipment. It also accounts for inflationary impacts across the board associated with Seward Electric.
Additionally, the city is facing deferred maintenance expenses, as well as cybersecurity upgrades and additional staff resources, which means revenue generated from the rate hike will be put to use addressing a wide array of municipal financial needs.
Aside from the rate study, a Seward Electric Ad Hoc committee recommended an increase of only $0.017 per kWh, prompting several members of the public to attend the Dec. 18 meeting in hopes of convincing the city council to adopt this lower number rather than the study-recommended $0.06 bump. Members of the council, however, reiterated their desire to sell the utility company to Homer Electric Association, and said they believed there would less impact to the city’s utility revenue from a reduced increase.
The resolution passed by a final vote of 5-2.