By Christina Killion Valdez
Post-Bulletin, Rochester MN 

Water and electric rates aren't slated for increases under the Rochester Public Utilities 2010 budget, approved Tuesday by the RPU board.

However, customers will see an increase in the Clean Air Rider. It's a separate line item on your utilities bill that's recalculated each year to reflect the annual debt service cost for the Silver Lake Emissions Reduction Project, based on a kilowatt-hour sales forecast. The tariff was implemented in April 2007 and is expected to expire in 2030 along with the $37 million debt on the project.

In 2009 the tariff was $0.00176 per kilowatt hour. For 2010 the rate will increase to $0.00228, or about 33 cents a month for residential customers, said RPU General Manager Larry Koshire. Before it takes effect Jan. 1, the tariff must be approved by the city council.

The council must also approve the utility's $142 million budget for 2010. The utility board, however, felt confident as the budget doesn't increase rates despite higher electricity costs and lower electric and water usage.

Instead, the utility is balancing its books through several cost-saving measures to compensate for a 4 percent power rate increase from RPU's wholesale power supplier, Southern Minnesota Municipal Power Agency, and a predicted decrease in utility sales.

The cuts include continuing the $4 million in cost reductions made in 2009, making no workforce increases, reducing temporary, seasonal and contract employees as well as a 5 percent reduction in cash reserves for the electric budget. It also plans employee furloughs, with all of its full-time employee groups agreeing to a 12-day furlough plan for next year.

RPU customers should expect, however, the implementation of a water conservation rate early next year. The rate change is driven by a state statute and remains under investigation by the board. However, at least one of the options presented to the board would mean rate increases for all users.

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