Rates: Frequently Asked Questions


2. Why does AMP have a monthly customer charge?

3. Who sets the rates for my electric service?

4. How often are rates adjusted?

5. What does my utility bill actually pay for?

6. How do you calculate the charges on my bill?

7. When demand for electricity falls and sales decline, shouldn’t my rates also go down?

8. Why can’t the revenue from the short-term sale of renewable energy credits (RECs) and cap-and-trade allowances be used to lower bills?

9. Does AMP charge less if I use my appliances at night as opposed to during the day?

10. How much does one kilowatt cost?


1. What does a rate cover?

The rates you pay for electricity and the customer charge cover the costs to run the electric utility, including purchasing electricity, transmitting power from generation locations to Alameda, setting aside prudent financial reserves, reading meters, responding to service calls, maintaining and improving electrical circuits, billing, installing new poles and wires, and repairing damage caused by vandalism, storms and auto accidents.


 2. Why does AMP have a monthly customer charge?

AMP has a monthly customer charge to help recover the true costs of basic customer service including meter reading, bill print and mailing services and customer account maintenance. There are a few other costs covered by the customer charge, but it does not cover the distribution system. These costs are recovered through the rates.


 3. Who sets the rates for my electric service?

While public utility commissions set rates for investor-owned utilities, AMP is the City of Alameda’s not-for-profit electric utility. The City’s Public Utilities Board, which is appointed by the City Council, approves AMP’s rates for electric service.


4. How often are rates adjusted?

The Public Utilities Board reviews rates annually. To ensure strong fiscal responsibility, safeguard reliability and protect AMP and its customers from sudden rate spikes, in 2010 the Board conceptually approved a five-year rate adjustment plan for fiscal years 2011-2015. The Board’s plan was the result of long-term planning efforts that included an annual strategic planning process and budget workshops as well as the development of a 10-year financial plan. The next rate adjustment will be for the 2015-2016 fiscal year.


5. What does my utility bill actually pay for?

AMP’s entire budget to operate Alameda’s electric system comes from our rates. Of every dollar: 39 cents goes toward purchased power, 17 cents goes to service and materials, 13 cents goes to power transmission, 13 cents goes to  labor, 7 cents goes to capital projects, 7 cents of every dollar is transferred to the City of Alameda, and 4 cents goes to customer programs.


6. How do you calculate the charges on my bill?

Based on your total usage the residential rate will vary depending first on your primary heat source and then on the associated tier levels. The kilowatt hour (kWh) allowance per tier has a corresponding rate for the summer and winter seasons and is prorated based on a 30-day billing cycle. Additional charges for residential customers are: customer charge, State Solar PV Program Charge and Utility Users Tax.


 7. When demand for electricity falls and sales decline, shouldn’t my rates also go down?

Not necessarily. Utility rates are tied to the cost of providing utility service—for example, the cost of building and maintaining distribution lines and poles. The cost to build and maintain these assets are there regardless of how much electricity is used during a given year. Customers can, however, reduce their electric bills by using less. Using less means customers don’t pay the costs that vary with usage. A customer’s electric bill can and will decrease by using less, even though the utility rates increase. The customer charge covers the cost of billing and meter readings costs--costs which are incurred regardless of how much energy a customer uses. 


  8. Why can’t the revenue from the short-term sale of renewable energy credits (RECs) and cap-and-trade allowances be used to lower bills?

The City of Alameda’s Public Utilities Board, which oversees AMP, has approved the short-term sale of renewable energy through 2019 of renewable energy that is not required to comply with AMP’s Renewable Portfolio Standard. However, the Board has explicitly directed that the resulting revenue from those sales be used for additional greenhouse gas emission reductions in support of the City’s Local Action Plan for Climate Protection.


9. Does AMP charge less if I use my appliances at night as opposed to during the day?

At this time, AMP does not have time-of-use meters, so it doesn’t matter what time of day you use your appliance. Your bill amount is based on your total electric consumption during the billing cycle. However, even though AMP does not have time-of-use meters at this time, our rates are still lower than many utilities that do have them. 


10. How much does a kilowatt hour cost?

Basically, one kilowatt hour (kWh) is the electricity needed to light a 100-watt incandescent bulb for 10 hours. However, it’s not one fixed rate that applies to each kilowatt hour. The rate depends on the time of year and the number of the number of bulbs the customer has. There are also three tier levels involved, so the more a customer uses, the higher the rate.

 
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