After months of debate, the Nome Joint Utility Board is raising rates.
Utility rates had not been raised for nearly 20 years until a temporary increase happened in January, as NJUS was unable to bring in enough revenue to remain sustainable.
The utilities books were so poor Wells Fargo dropped them, forcing the utility to take on a $2.2 million line of credit from the city last November.
The temporary rate hike in January brought in more cash than was expected, but those rates sunsetted in June, leaving the board scrambling to instate a rate that would chip away at its debt and stabilize operations.
A January rate study revealed real changes that needed to be made. At the board’s most recent meeting, utility manager John Handeland explained that water and sewer rates needed to be doubled in order to be self-sufficient.
Handeland said it was no surprise that rates needed to be raised after years of stagnation, though the board has been reluctant to instate a permanent rate hike. One member in particular, Carl Emmons, was hesitant to contribute to Nome’s already high cost of living, which, he suggests, contributes to its transient population. “People are coming here and working for several years and when they leave they stay employed, but they don’t pay and property taxes or sales taxes or anything,” Emmons explained, “that’s happening more and more as the cost of living here gets higher and higher.”
Despite hesitations, the board was successful in raising rates. Water and sewer rates were raised an additional 10 percent, on top of the temporary increase of 12.5 percent. The average household in Nome can now expect a bill of around $98 per month.
On the electrical side, the board did away with a tiered system and settled on a single energy rate of just under 20 cents per kilowatt-hour. They also raised meter charges from $5 to $20 for households and from $40 to $60 for commercial customers. In all, the utility says the increases could bring in an additional $1.3 million.
Even with the increases, board member Berda Wilson suggested NJUS has a long way to go until it’s back in the black. “We’re still, I think, on shaky financial ground,” Wilson explained, “and with the increases we still have to ensure that we’re still watching every dime, we’re being as frugal as possible, that we’re billing every bill that we can send out, it could be a small bill but those small bills could add up to hundreds of thousands of dollars.”
Despite reaching an agreement on rate increases, Emmons was left disappointed. “Coming here I wish we’d had the time to put a little more effort into cutting costs rather than just raising rates,” Emmons said, adding, “I think it’s always too easy to raise rates. I think government just likes to raise the rates and not worry about ever having to cut anything.” Emmons hopes that, in the future, the board can keep its eye on cutting costs rather than relying on rate hikes.
The newly adopted rates entered into effect on August 1.
