Burlington, VT – Burlington Electric Department (BED), a not-for-profit public power utility serving the City of Burlington, today announced to the community that it is proposing a 7.5 percent electricity rate increase that, if approved by the Public Utility Commission (PUC), would take effect later this year. The increase follows an exceptional 12-year period during which BED bucked industry trends and inflationary pressures through strong financial management and multiple cost-reduction efforts. Even after the rate increase, BED’s total rates will remain low compared to Vermont and New England averages:
The increase is being driven primarily by the global COVID-19 pandemic, which has caused several negative financial impacts on BED. Due to those financial effects, BED projects that it will begin FY22 with approximately $5 million less cash-on-hand than otherwise would have been the case. Pandemic effects have included:
“We understand that the global pandemic has been challenging for our community, creating economic hardship for many of our customers,” said Darren Springer, General Manager of BED. “The pandemic also negatively affected BED such that filing a rate case is necessary. To support our customers, we currently are offering several relief programs, including suspending disconnections for non-payment, waiving late fees, and providing extended budget billing plans. BED also is continuing to advocate for arrearage assistance programs for our customers. In addition, to help offset the rate increase for low-income customers, we will for the first time be offering a monthly bill credit program for customers who are enrolled in the state’s fuel assistance program. Our Burlington Electric team is incredibly proud of the value we have delivered for our community over the last 12 years without a rate increase and looks forward to continuing to work hard to keep future rate adjustments low, while providing the exceptional customer care and reliable renewable energy our community expects and deserves.”
“For decades, BED and our Commission have endeavored to reflect the goals of our community in providing safe, reliable, affordable, and environmentally sound energy,” stated Gabrielle Stebbins, Chair of the Burlington Electric Commission. “As a public power municipal utility, we operate as a not-for-profit organization, always striving to keep rates as low as we can. After an unprecedented 12-year run without a rate increase and following severe impacts from COVID-19, a change in rates is necessary to continue to reflect our community goals.”
The BED team has worked hard to cut or defer expenses wherever possible, and moderate controllable cost increases over the last several years. The average growth rate in controllable costs between FY07 and FY16 was 5.84 percent, but following implementation of cost-cutting steps, the average growth rate has been reduced to 3.55 percent for the period since FY16. Despite our success with controllable costs, adverse effects on BED from the pandemic, increased transmission costs, and delayed customer projects that would have added sales revenue have contributed to the need for a rate case. Specific factors leading to the rate case include:
BED was able to avoid rate cases during this extraordinary 12-year period through strong financial management and determined efforts to reduce costs. These efforts included:
Including the proposed rate change, BED’s total rates remain well below what they would have been had they just kept pace with the rate of inflation between 2010 and 2021.
To help our customers handle pandemic-related challenges, BED currently is offering several relief programs and taking steps to secure additional arrearage assistance, including:
Additionally, for FY22, BED is proposing to help low-income customers through a new energy assistance program designed to mitigate the effects of the proposed rate change. Eligibility requirements include being enrolled in the state fuel assistance program, which supports customers with incomes at or below 185 percent of federal poverty levels. This proposed BED energy assistance program is projected to help more than 1,300 qualified residential BED customers. While the proposed energy assistance program is a temporary relief measure, BED is exploring a permanent low-income rate with an FY23 implementation goal.
The Burlington community will have many opportunities to comment on the proposed rate case, including during the following meetings:
Further, after BED files its rate case with the PUC on or about June 15, members of the Burlington community will have the opportunity to provide comment at public hearings and through written testimony during the PUC’s thorough rate review process, which is expected to span many months. The rates charged to customers of Vermont public utilities must be reviewed and will be approved only if the PUC determines that the proposed rates are just and reasonable. Prior to a final decision from the PUC and in accordance with PUC rules, BED will add a 7.5 percent rate surcharge on customer bills beginning in August 2021. This surcharge will continue until the rate case is finalized, at which time BED will adjust customer bills based on the outcome of the rate case. The public can learn more about PUC rate case procedures from this document.
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