City Council approves Huntsville Utilities rates to go up annually

City Council approves Huntsville Utilities rates to go up annually

HUNTSVILLE, AL (WAFF) - The Huntsville City Council voted Thursday night to increase Huntsville Utilities (HU) rates effective January 2019.

In the new year, rates will go up $1 per month annually. HU officials say the increase is necessary to offset Tennessee Valley Authority (TVA) demands and other charges.

Through a passionate public outcry on the matter, several residents took to the podium to express concerns. “I’m disappointed that we took action so fast, and that we didn’t have some additional options that looked at increases to the variable charge or people paying what they use compared to what they don’t," said Daniel Tait.

Huntsville Utilities' president and CEO, Wes Kelly, says the availability rate is how they make their money.

Revenue is split between availability rates and usage rates. 85 percent of usage automatically goes to TVA, and the availability is what HU keeps. As it stands after tonight’s vote, residential rates will increase from $9.17 to $14.17 by fiscal 2022.

City Council members questioned a second rate increases in just about two years. “At the time that that rate increase was put into affect, it was known that we would be coming back in a relatively short period of time, and I acknowledge it is a short period of time. Tonight, gives us a five year ramp," explained Kelly.

After the five-year plan is complete, HU officials hope they won’t come back with additional increases. This structure was designed to withstand anticipated growth in the Tennessee Valley.

“It is a small increase, but we hear from residents already struggling to pay their bills now - much less without any increase...no matter how large or small," said Tait.

To mark FY19, rates will go up in January 2019. In October of that same year, they will increase again to mark FY20. Subsequently, the will go up every October until FY23.

In the coming days, HU will present the approved rate increase to TVA.

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