Electricity and water rates in Ketchikan will likely rise next year. That’s after the City Council approved a budget that takes into account higher utility rates to balance its 2021 spending plan.
There’s good news and bad. The good news is that nobody at the city faces losing their jobs. But as for the bad: utility rates are likely to go up.
Ketchikan mayor Bob Sivertsen says the rise is in anticipation of higher wholesale power rates set by the Southeast Alaska Power Agency.
“One of the factors in regards to having to put in a raise is there was a failed submarine cable between two islands. In order to get that replaced, it’s $11 million,” Sivertsen told the council Thursday.
The regional power agency is known as SEAPA. It also serves Wrangell and Petersburg.
The rates are intended to rise 1.5%. City officials had pitched hiking rates twice that much. But City Manager Karl Amylon justified the lesser amount saying the wholesale hikes will likely roll out more gradually in line with a recent proposal from SEAPA’s chief executive officer.
“Although nothing was officially voted on, I think the board of directors was very receptive to his proposal,” Amylon said.
Amylon would know: he and Mayor Sivertsen sit on SEAPA’s five-member board of directors.
What will this mean for rate-payers? A typical residential consumer using about 1000 kilowatt-hours would pay roughly $20 more for electricity in a year.
Water rates are also expected to rise by 5%. That’ll cost residents an extra roughly $35 a year. Ketchikan residents pay a flat, unmetered rate for household water.
City Council Member Abby Bradberry voted against increasing rates for both power and water.
“I just think we have to realize that people are already in a stressful situation financially and I don’t support raising the rates currently — but would once the pandemic is over,” Bradberry said.
Amylon told the council that the utility rate increases are not final. While the city budget shows the council’s intent to raise rates, Amylon says they’ll have to be approved with an ordinance at a future meeting to take effect.
The final Ketchikan Public Utilities budget passed 4-3. Bradberry joined Council Members Sam Bergeron and Riley Gass in opposing it.
While utility rates are likely headed up, the city won’t be cutting jobs. Officials initially proposed cutting 15 city positions. But in the final draft of the budget, no one is set to lose their job. The council voted to eliminate vacant positions and not to fill some openings caused by retirements or turnover.
Instead of laying off staff, the council voted to put some $1.2 million in unspent federal aid money towards police, fire and EMS salaries. Only Bradberry voted no on the budget. She said she would have liked to see more federal pandemic relief dollars going to residents facing economic hardship rather than back-filling city salaries.
In the interest of full disclosure, SEAPA is among KRBD’s financial supporters.