Residents who were told they will be required to pay a one-time charge of $4.30 on their next power bill have received false information, according to a city official.
"An increase in fuel costs for fiscal year 1989 has already been taken into account, so no additional charge is necessary," said Ron Hardy, administrative services division manager for Provo City's Department of Energy.The Provo City Council approved an across-the-board 9.8 percent electricity rate increase during its June 21 council meeting.
Several published reports led residents to believe that they would have to pay the extra charge because of unexpected heavy power demands in June. Hardy said many people were upset because they thought they would be charged the one-time fee and the 9.8 percent increase on this month's bill.
During 1989, the city will use a fixed power cost-adjustment factor, which will keep rate increases constant each month for the entire year. If the city has over-collected at the end of the year, the estimate for the next fiscal year will be reduced, Hardy said.
The 9.8 percent increase will add about $5 per month to an average customer's bill, Hardy said.
In the past, the city used a power cost-adjustment factor which fluctuated every month depending on energy use.
Electricity rates went up to help alleviate a $1.2 million operating deficit in the energy department.
"We needed additional funds to cover additional fuel costs we've experienced," Hardy said. "We have used our reserves, so we need to replenish them. We also need to make some capital improvements."