The Kaysville City Electric Utility has experienced significant increases in operational costs in the acquisition of electric resources. The Kaysville City Power Commission has thoroughly evaluated the costs and operations of the electric utility and has made a recommendation to the Kaysville City Council to increase electric rates by a 5% increase across all kWh tiers and demand charges as soon as practicable.

Power Commissioner Alan Farnes said that he has lived in Kaysville for 37 years and has been serving on the Kaysville Power Commission for six years. He has worked at Bountiful City Light & Power for 45 years, and for the last 15 of those years, he has been the Generation Superintendent. Farnes recently helped the City Council understand some of the challenges the Kaysville Power Department is now facing – or will be soon. 

Farnes said the first issue is relative to wholesale power costs that have been unusually high through 2022. The city did not have any months in 2022 where they paid less for power than in previous years. Several factors have contributed to this cost increase: drought, which has limited the availability of hydropower, shut down of some coal plants, and the decreased coal supply has reduced availability of coal generation. In the month of December, wholesale power costs to Kaysville amounted to over half a million dollars more than in previous years. The months of August, September and November were also very high, and it is expected that rates will continue to be high into 2023 as well. 

Farnes said power costs increased $4.6 million from 2020 to 2022 and a rate study in 2016 recommended and predicted rates should be nearly 25% higher than the current rate. Capital improvements have increased due to higher priced materials and necessary large-scale infrastructure improvements. He said after analyzing the increases in power and operation costs over the last three years, including experiencing loss of power resources, staff feels it would be advantageous to have a small increase immediately to help maintain costs as they further evaluate the need for potential restructuring of the Kaysville power rates.

Farnes said implementing a rate increase sooner rather than later will help to try to curb the problem of not covering costs for power. He said the Power Commission will likely need to meet again after the summer to look at status, and if another rate increase will need to be done in the fall. He said he does not feel that Kaysville has reinvested much into their own power system and more reinvestment needs to be done before considering the transfer of any power funds to another use. 

Farnes said the 5% increase is not a resolution to cover the unprecedented recent increase in costs but a necessary increase to maintain the base level needs for operation. Loss of power resources drives up power costs from open market purchase. The average home at a usage of 1,000 kWh a month will see an increase of approximately $4.50/month in their power utility bill. Even with a 5% increase, rates will still be below Rocky Mountain Power and the majority of UAMPS member rates. 

The City Council voted unanimously to amend the Consolidated Fee Schedule to change the Power Rates by 5% to be effective March 1, 2023.