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updated: 4/2/2014 12:14 PM

Naperville raises electricity rates to fill deficit

City to borrow money from other funds to cut deficit

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Naperville City Council narrowly approved electric rate increases Tuesday night that will cause the average homeowner's bill to rise two years in a row beginning with an increase of $4.90 a month effective May 1.

The 6 percent rate increase approved by a 5-4 vote will bring the monthly bill for the average residential customer in Naperville to $97.69, up from the current $92.79, said Mark Curran, director of the city-owned electric utility. A 7 percent increase effective May 1, 2015, will further raise rates to nearly $103 a month for the average residential customer, and both increases apply to commercial customers as well.

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The rate increases are expected to help the city fill a gap in the budget of its electric utility, which has built about a $14 million deficit because the cost of buying power has exceeded projections.

"I don't like this rate increase. I understand why we're doing it. I prefer that we not have to, but we also have to keep our fiscal house in order," said council member Grant Wehrli, who was one of five including Mayor George Pradel who voted in favor of raising rates. "We have to charge what it costs."

Council members said the city also will seek to recoup some of its losses by putting pressure on its power supplier, the nonprofit co-op Illinois Municipal Electric Agency.

The city's public utilities advisory board is conducting an investigation into the reasons the agency has charged Naperville more than expected, and council members said they plan to meet with officials of the Springfield-based co-op when they travel next week to the state's capital on a lobbying trip.

The public utilities advisory board had suggested a 7.86 percent rate increase May 1 followed by a 7 percent rate increase next spring, but those increases were rejected as too steep for ratepayers. The council also rejected a proposal to first try to negotiate with the Illinois Municipal Electric Agency before adjusting customer rates. Naperville is in the third year of a 24-year contract with the agency that began in 2011.

The rate increases approved Tuesday night are expected to bring the electric utility's deficit to $5.2 million by the end of April 2016. In the meantime, the utility will borrow up to $19 million from either the water utility fund or the vehicle replacement fund to be paid back at a 2.7 percent interest rate.

Tuesday's action also eliminated an electric infrastructure availability fee that the Naperville Area Chamber of Commerce called an "impediment to economic growth and business investment," and called for the utility's top 20 electric customers to be billed at different rates based on the times they use power.

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