An e-mail from a resident reminds me that there’s lots of public discussion about tax rates, but little public/media attention when city electric, water, and wastewater rates go up — even though most of us pay more for city utilities than we do for city property taxes.
I think the resident was hoping that there was some terrible mistake in his bill when he wrote that since 2006 “my electric and sewage price per unit has increased by 25% and my water price per unit has increased by 50%.” His estimates of the rate increase are a bit high, probably because there are minimum charges built into each of those bills (currently $25 per month for water and wastewater and $7.70 for electric) that mean you can’t calculate the unit price by dividing your total bill for the month by your usage for the month. However, the reality is that the rates have gone up — a lot.
Having dug into the rate increases to respond to this citizen, I’m going to document the information here.
The increases are due in large part to the fact that the costs of many of the items that are required to deliver electricity, water and wastewater service (including natural gas, coal, electrical transformers, and electric cable) have gone up much faster than the consumer price index. The city is simply passing the costs along to us customers. Additionally, though, a portion of the increases is due to decisions the city made several years ago to subsidize part of the cost of extending utility service to remote locations such as Rarity Ridge.
Electric rates have changed several times during the last few years, almost entirely due to changes in TVA’s charges for electricity sold to the city. (There also have been some modest increases by the city.) TVA rate increases have resulted mostly from factors such as big increases in its costs for the fuel it uses to generate electricity (mostly coal) and reduced hydroelectric generation due to drought. Fortunately, sometimes TVA makes downward adjustments in its rates. TVA adjusts its rates quarterly, and our rates change quarterly as a result. The most current Oak Ridge electric rates (from April) are on the web at this address. Those rates are lower than they were a few months ago.
Water rates have increased more than 40% since 2006. Those rate increases received final approval from City Council in May 2007 (the month before I was elected to Council), as documented here.
That increase was related to increased costs of delivering water, but a contributing factor was a big permanent drop in water use by Department of Energy facilities. The fixed costs of operation did not drop when DOE’s usage dropped, so the city now must to divide those costs across fewer gallons of water. (Also, a provision of the city’s contract with DOE limited the percentage by which the city can increase DOE’s rates, meaning that the rest of us are paying more…)
Wastewater rates last increased in May 2008 (see documentation on the city website). I don’t recall the percentage increase, nor the specific reasons for it, but I know that the costs of energy are a big part of the cost of wastewater treatment, so energy price increases are likely to explain a big chunk of the increase.
What to do about this? Well, most of us could reduce our bills by conserving. At my house, we’ve seen our electric usage go down a surprising amount because of (1) replacing light bulbs with compact fluorescents, (2) getting rid of the old refrigerator that we kept as a second fridge for convenience (for example, to hold “fresh” orange juice that we bought on sale), and (3) replacing our old chest freezer with a newer model that’s more efficient. Not only does that reduce our household bill, but if our society could significantly reduce its overall demand for energy, America would become less vulnerable to the price manipulation by the international oil cartel that causes energy prices to go up…
The widening of Hwy. 95 will help with future rates, as it will facilitate extension of water lines to westernmost Oak Ridge, which will in turn lower future costs of provding services there by eliminating the need to purchase water for Rarity Ridge. Economic development that adds more water users (ideally in areas already on the main water system) would help by adding more users to split those fixed costs.
Oak Ridge is now participating in TVA’s Generation Partners program that provides incentives for generating green electricity (something that should make a small contribution to reducing the influence of that international oil cartel).
And maybe we can find some ways to increase efficiencies in the utility systems.
And when property taxes rise, so does our utility bills. Nearly $3 Million was paid by Oak Ridgers through their utility bills to pay for utility property taxes.
This is good information, Ellen. A quick comparison of the first half of 2006 to the first half of 2009 revealed that our personal gas bill is actually down by 2% and our combined electric/water/sewage/refuse bill is up 39%.
One thing that has been on my mind – since we’ve started the recycling program, my other refuse has decreased significantly (by 75% or more). Assuming the same is true for many other Oak Ridgers, is there any chance of negotiating a lower rate for that contract? Also, since we have to take our recycle bin to the curb anyway, why not look into eliminating back door pick up of refuse and reduce the cost that way as well?
Why do I have to follow what you want for service, Trina? I’ve brought these comments up over and over again and still people have to march to other people’s drum. Service like garbage pick should be a subscription service. Should everyone be brought The Oak Ridger newspaper paid by taxpayers because people write letters to the editor? No, choice is what this community needs and not programs and corporate taxes shoved at us. The recycling hasn’t brought down garbage headed to the landfill and certainly hasn‘t increased the purchasing of recycled goods. As an environment saving program, I’ve seen better at animal farms. Also, RecycyleBank sorters have truckloads of garbage of contaminated goods and non-recyclable items sent to the landfill. I’ve no need for back door pick-up, but that doesn’t mean other households wouldn’t like to keep it. I’ve no need for being charged for people to sort my garbage, I’ve done it before and still do with the RecycleBank program. It hasn’t saved me anything but cost me more money. We can reduce our garbage costs by removing the over $400,000 a year RecycleBank program and let people subscribe to the service like it is being done in Knoxville.
This city was raised on bullying citizens by rag covered elitists. I plan to break that trend in my household and speak for choice and what is common sense in Oak Ridge. I hope you can do that also, Trina.
It’s great to know how much the recycling program is reducing the waste volume to the landfill, Trina. However, that success is not going to reduce the cost of waste collection. The price of our current contract — a total of $13.22 per month per household for weekly “backdoor” waste collection and curbside recycling ($7 of that is on the utility bill and the rest comes from taxes) — is a bargain compared to what most other communities pay (often for far less service than we receive). Ask around about prices for service in areas like Farragut, and you’ll be surprised.
Sorry, Ray, but I can’t agree with you regarding waste collection. Having one company serve every household in the city (with the city government being the only customer the company needs to bill) greatly reduces the cost of the service for everyone when compared with the cost of subscription services. (See my comments above about pricing.) Also, the fact that every single-family household in the city has refuse collection service helps ensure that people can dispose of their trash properly, which protects public health and enhances the city’s appearance. If more of Oak Ridge’s neighbors had community-wide refuse collection, there would be far less illegal dumping on places like Key Springs Road. And you can be sure that our recycling program is reducing what gets sent to the landfill.
You are correct, Ellen, so don’t be sorry about rising costs of our garbage. What are those numbers of landfill destined garbage? So what is the next service, beyond sorting garbage, will our city pay for to make our city nicer, maybe mowing our yards? Seems to me there are city ordinances, or do we expect our city to do where policy isn’t effective? This isn’t a direction that will make our city attractive.
So do you plan to work to stop back door service for our citizens, Ellen? I understand the date to think about that is years off, maybe elected officials don’t have to think about the future, but citizens do.
Oak Ridge has a long-term contract with Waste Connections, and back-door service is part of that contract. No one has any intention of changing that.
Thanks, Ellen. Sorry you have become a magnet for Yellow Cake’s nutty rants.
LOL, removing service and amenities like back door service, school busing, police officers is a nutty rant just to afford a service you are too lazy to do yourself, yet we have to live with whatever it takes to achieve your world, an incorrect direction, Trina.
I LOVE IT WHEN THE LEADERS SAY THE PROPERTY WILL
REMAIN THE SAME BUT MY UTILITY RATES GO UP AND I SEE WHERE THE ELECTRICAL DEPARTMENT HAS EXTRA MONEY TO TRANSFER A COUPLRE MILLION TO THE GENERAL FUND RATHER PASS THE EXCESS BACK TO THE CITIZENS —- I GUESS THIS IS SOME MORE OF OAK RIDGES TRANSPARENCY IN GOVERNMENT RPBBING PETER TO PAY THE CHAMBER OF COMMERCE. CHUCKLE — I MEAN ACCOUNTABILITY….
WHY CAN NOT THE CITIZENS USE THEIR RECYCLING RAZZLEBERRY COUPONS TO REDUCE THEIR UTILITY BILLS???
Leroy: Confusingly, the city General Fund transfers money to the Electric Fund to pay for the electricity to operate city buildings, streetlights, etc., and the Electric Fund transfers money to the General Fund — for example, for “in lieu of property tax” payments on the electric system’s property. Isn’t accounting fun?
RecycleBank coupons are generally issued by businesses to promote the business. It wouldn’t make sense for the city to issue coupons to promote electric use.
Our utility bill covers more than electric charges.
True, but Leroy’s comment focused on the fact that the Electric Fund pays money into the General Fund.