Burlington Electric plans to increase its electric rates by 7.5% in the coming year, the utility announced Tuesday.
The city’s electric utility has not increased its rates for more than a decade. But last year, the utility’s revenue dropped by $2.1 million when the pandemic shuttered buildings and turned off the lights. And the utility’s finances have not yet bounced back, said Darren Springer, general manager of Burlington Electric.
“We’re still seeing impacts on our system, and we’re projecting that those will continue for at least some period of time in the next fiscal year,” Springer said.
Although Burlington Electric’s residential sales have increased since March 2020 — as more people spent time at home — its commercial sales dropped significantly. In April 2020, commercial sales were down 20% from the prior year, according to figures provided by the utility.
Since then, commercial sales have recovered to about 5% below typical levels. But because commercial use accounts for the bulk of Burlington Electric’s revenue, the loss has had an outsized impact. The rate increase will help to offset that.
For the typical residential consumer, the change would increase electricity expenses by about $5 per month, the city projects. For commercial customers, the average bill will increase about $6.60 per month.
However, households that qualify for Vermont’s fuel assistance program — which helps low-income families and individuals pay for home heating — may enroll in a new energy assistance program, meant to mitigate the rate increase through 2022.
Springer said he expects that program to “fully offset” the residential rate increase for those who qualify. Burlington Electric also plans to launch a long-term assistance program for low-income households, which Springer said he hopes to roll out in 2023.
Data that Burlington Electric will present this week to Burlington’s Board of Finance also shows the pandemic’s economic toll on residents: The amount of money owed on electric bills has quadrupled over the past year. The 60-day average has steadily increased since March 2020, now totaling around $900,000.
With the rate hikes, Burlington Electric’s commercial prices are now slightly above the statewide average. Its residential rates will still remain below Vermont’s average. Like other states in the Northeast, Vermont has some of the highest electricity prices in the nation.
The proposal needs approval from Burlington’s board of finance, and from the City Council. It will then go to the state Public Utility Commission for final approval. If it passes, the increase will take effect in August.
