Richland residents likely will see their monthly electric bills grow by 5 percent starting in March.
The city council Tuesday gave preliminary approval to an ordinance that would raise user rates for the city's electric utility by 5 percent for residential customers and 10 percent for all other types of accounts.
That amounts to a $5 increase on a $100 residential bill, or a $10 increase on a $100 bill for all other customers.
Energy Services Director Bob Hammond told the council that an increase is needed to catch up to the cost of providing service, especially as the Bonneville Power Administration moves to a new rate scheme affecting the city.
Otherwise, the electric utility could be looking at a $5 million revenue deficit for 2012, Hammond said.
The proposed increase is based on an analysis of how much it costs to provide electricity to the city's homes and businesses. Richland's electric rates haven't been raised since 2004, but the cost of buying power has increased in recent years.
Hammond proposed offsetting half of the projected deficit by putting less money aside for capital projects and purchases so that an extra $2.5 million will be available for operating expenses.
The rate increases are expected to bring in about $3 million.
Council members noted that rate increases are being driven largely by state and federal energy policies over which the council has no control.
The council will have a public hearing on the new rates on Jan. 17 and take a final vote on Feb. 7.
Also Tuesday:
-- Newly elected council members Brad Anderson and Terry Christensen were sworn in for their four-year terms. Returning member Phil Lemley also was sworn in for a four-year term. Councilwoman Sandra Kent was sworn in for a two-year term.
-- Council members re-elected John Fox as the city's mayor -- a largely symbolic position in Richland's council-manager style of government. Councilman David Rose was elected mayor pro tem. They'll serve in those roles for two years.
-- Michelle Dupler: 582-1543; mdupler@tricityherald.com
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