HUNTSVILLE, Ala. — City council members on Thursday unanimously approved a request by Huntsville Utilities to increase rates for electricity services. The combined increase of 5.1% will occur over the course of 2025, with the first 3.9% increase taking place in January and the remainder next October.
Our original reporting continues below:
Homes and businesses that get their power from Huntsville Utilities will be paying about five percent more if a proposed rate increase is approved at the October 24 city council meeting.
The utility requested what it calls a "rate modification" at Thursday's City Council meeting. After a presentation and discussion, council members voted to table the proposal and look at it with fresh eyes at the following scheduled meeting.
The increase would be spread across a 10-month period starting in January and only affects the electric portion of customers' bills.
Huntsville Utilities said the rate change is needed to cover the cost of construction projects. It said the price of those projects has ballooned with the increased cost of essential materials, such as PVC pipe, wire and pole-mounted transformers.
“As a cost-to-serve municipal utility, we have been feeling the impact of cost increases for several years,” said Wes Kelly, CEO of Huntsville Utilities. “This rate modification is a last resort in response to those rising cost.”
Here's how the increase would work:
- Residential customers would see a 3.9 percent increase in January 2025. That change accounts for a $3.00 increase to the Residential Availability Charge and a $0.00288 per kWh increase to the Residential Consumption Charge.
- In October 2025, an additional Residential Consumption Charge of 1.3% increase would take effect. That equates to a $0.00114 increase per kWh. Only customers with electric service greater than 200-amps will see an additional $5.55 increase to their Residential Availability Charge.
- Commercial customers can expect an increase of $3.00, $4.45, or $5.60 to their Commercial Availability Charge, and a $0.00288, $0.00416, or $0.00360 per kWh increase in the Commercial Consumption Rate. Starting in October, there would be another 1.3% increase of $0.60, $0.89, or $1.12 in the Commercial Availability Charge and increases of $0.00121, $0.00139, or $0.00129 per kWh in the Commercial Consumption Rate.
The presentation to the City Council is set for the meeting that will be held at City Hall at 5:30 p.m.
