While city officials have pledged to hold Provo's basic electric utility rates firm for the next 12 months, residents nonetheless will be paying higher power bills in the near future.
And they can blame it partially on dry weather in the Northwest, where recent drought years have cut the volume of water flowing through hydroelectric dams and reduced the amount of relatively cheap hydropower available to Provo.But city officials know no matter how well they can justify higher utility bills, the bottom line is customers will pay more, and they won't be happy about it.
No one will learn how much higher power bills are likely to be until a Provo Energy Department cost study is completed in the next two weeks.
But the general result already is clear - with less of the inexpensive hydropower available, Provo must rely more on costlier power generated by coal-fired plants.
And Provo utility customers can expect to see those higher generating costs reflected on their power bills.
The city bills residential customers monthly for three separate charges:
-Service charge, the price a customer pays to be on the power system.
-Energy charge, which pays for power used.
-Power cost adjustment, sometimes called a fuel adjustment fee, a surcharge that allows the city to pass along to customers any fluctuations in the cost of generating power.
Both Mayor Joe Jenkins and the City Council have indicated that basic rates - the service and energy charges - will not be increased for at least 12 more months.
But because the city's cost of generating power is rising, it is the power cost adjustment portion of their monthly bill where Provo ratepayers will soon notice higher surcharges.
"We won't know how much the power cost adjustment will go up until we find out where everything fits in with the budget," said Ron Rydman, Energy Department director.
But Rydman's budget request for fiscal 1988-89, which begins July 1, shows projected power cost adjustment revenue for next year up $2.1 million over this year's figure, from $3.3 million to $5.4 million.
However, Rydman said that $2 million revenue increase is misleading, because he will approach the council within the next few weeks to request that additional funds be added to this year's budget to offset higher generating costs.
The budget adjustment for this year will be at least $500,000 and probably more, Rydman said.
That means the increase in power cost adjustment revenue next fiscal year probably will be just over $1 million more than this year.
The power cost adjustment surcharge is based on an assumption that the Energy Department's average cost for fuel and energy will be 1.04 cents per kilowatt hour sold to customers.
If the actual average cost is higher than the assumed average during one month, the department adds the surcharge to customer bills the next month. If the actual average is lower, a credit is granted to ratepayers.
The current power cost adjustment surcharge is about nine mills per kilowatt hour. But that rate is artificially high because Provo now is recovering a $1.1 million underbilling from ratepayers through the surcharge. The underbilling was caused by a computer error last year.
The surcharge likely will drop about two mills per kilowatt hour once the underbilling is recovered sometime this summer.