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updated: 4/1/2014 5:35 AM

Naperville to vote tonight on raising city electricity rate

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A proposal that would raise electric rates in Naperville 6 percent starting May 1 and 7 percent a year later is set for a vote during today's city council meeting.

City staff members have said rate increases are necessary to minimize a budget shortfall in the city-owned electric utility, which is projected to have a $14 million deficit by the end of April.

Although officials originally suggested two consecutive 6 percent rate increases, city council members now are proposing a 7 percent increase to begin May 1, 2015. If approved, the higher rates are projected to bring the electric utility's deficit down to $5.2 million by the end of April 2016.

The utility's cash problems have arisen mainly because the cost of buying power from Illinois Municipal Electric Agency, a nonprofit that delivers electricity to 34 members including Naperville, has exceeded predictions used in a rate study the city conducted in 2011.

The agency has passed along higher costs of the Prairie State power plant in southern Illinois, which was over budget and behind schedule.

The cooperative has not made as much money selling excess power to the wider market and Naperville electric customers have used less power than predicted, all of which have had negative consequences for the utility's finances.

The city hosted an open house to answer public questions about the electric utility's deficit and presented on the topic to the Naperville Area Chamber of Commerce's legislative committee.

Chamber President and CEO Nicki Anderson in a letter said the organization supports passage of the electric rate increases because they allow for removal of the electric infrastructure fee, which she called an "impediment to economic growth and business investment."

A couple residents thanked city officials for a helpful and informative presentation on the economic factors that led to the deficit, but many said they oppose rate increases above the yearly cost-of-living adjustments based on inflation.

"I can't help but register an objection to such a whopping electric rate hike for two consecutive years, way ahead of the inflation rate and a tough deal for retired folks like me," Raymond Janicek said in an email to the city.

Council members are expected to vote on the proposed rate increases at 7 p.m. in the municipal center, 400 S. Eagle St.

The city council also is set to consider borrowing $17.3 million to help fund projects included in the capital improvements plan during the next five years.

Highlights of that plan include contributions toward parking and a new Riverwalk segment at the Water Street District, placement of more automatic external defibrillators throughout the community, upgrades to the city's website and installation of an integrated traffic management system on Washington Street.

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