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April 17, 2012

Public Utilities Board Approves Third Year of 5-Year Rate Adjustment Plan

Last night at the regular meeting of the City of Alameda’s Public Utilities Board, the Board approved the third year of the five-year a rate adjustment plan for all customers.  The average overall rate adjustment of 3.25% for Alameda Municipal Power (AMP) customers is effective July 1, 2012.    

In 2010, the Public Utilities Board approved a five-year rate adjustment plan for FY 2011-2015 in order to ensure strong fiscal responsibility, safeguard reliability and protect AMP and its customers from sudden rate spikes.  The Board’s plan was a result of long-term planning efforts that included Annual Strategic Planning and Budget workshops and development of a 10-year financial plan.  

AMP’s financial assessment showed that revenue increases were needed due to higher power and transmission costs not controlled by AMP, lower electricity demand and increased operating expenses.  Transmission costs throughout the State have gone up nearly 400% over the last ten years and are projected to triple again over the next ten years, due to the cost of replacing and constructing facilities to connect to new renewable power sources.   Additionally, AMP must replace an existing inexpensive power contract, entered into in 2000 and terminating in 2014, with replacement power that is priced higher due to market conditions.

“All of these factors could have resulted in double-digit rate spikes; however, the Board favored small but steady rate increases spread over several years,” said Greg Hamm, Public Utilities Board president.  “We’ve worked hard to minimize these adjustments, and we’re committed to working equally hard to make sure our customers continue to have lower electric bills, excellent reliability, and top-notch customer service.”

For the third year in a row, AMP has met the Board’s target of limiting rate increases to below 5% per year.  The average residential customer can expect to see a 4.4% increase in their monthly bill via a monthly customer charge of $2.50.  Commercial customer impacts will vary depending on use, but the average rate change is expected to be approximately 2.4%.  AMP rates remain significantly below PG&E rates, with residential rates approximately 24% lower and commercial rates 8.4% to 15.7% lower.   Additionally, AMP continues to take all feasible steps to control costs.  AMP has reduced its staffing to below 1998 levels and has streamlined and implemented technology solutions to lower operational costs.

AMP is one of the City of Alameda's largest businesses, serves the community with a reliability record within the top quartile of all western U.S. utilities, and is a leader in providing renewable power.   As a community-owned and locally operated electric system, AMP is a direct contributor to the City of Alameda’s economic well-being and quality of life.  Over $4 million was transferred in 2011 to the City’s general fund for city services.   Additionally, AMP’s lower rates save Alameda customers $10 million a year.   

AMP also offers a wide array of programs and services for customers who are interested in controlling their energy costs. Customers who are having trouble paying their utility bills can get help through a variety of financial assistance programs offered by AMP. For those interested in lowering their energy usage, AMP has a number of energy efficiency programs and rebates to help customers save money and conserve energy. Customers can also request a free energy audit to learn how to manage their energy usage and reduce costs.

For more information about the rate adjustment or to learn more about how to reduce your energy costs, visit the Alameda Municipal Power website.