There were a number of questions posted about July 2020 bills being much higher than June 2020. This post is basically an RPU Bill 101. RPU is always happy to review your bill if you think there is something wrong. You can contact RPU here. RPU Contact Information
The likely reason that most people are seeing much bigger July bills than June are 2 factors.
- The July billing period had 34 days, while the June had 27 (not sure if these numbers are the same for everyone).
- The July billing period was much hotter than June, meaning some people likely saw more AC & water (for irrigation) usage.
- On June 1st an electric summer rate starts. Most of the year energy is $0.107 per kWh but from June through September it is $0.128 per kWh.
RPU is an exceptionally well run organization. I am the City Council member who represents the City on the RPU Board of Directors and have done so since 2013. As such I have a pretty good understanding of why rates are as they currently are. I will describe the components of the Bill below. There are 4 utilities on the bill, 2 of them are from RPU (Electric and Water) and 2 are on the bill but managed by Public Works (Sewer and Stormwater). In general the comments below are for most residential bills.
There are 2 components to this charge. A customer charge and a “per kWh” charge. From 2019 to 2020 the overall change to electric rates was set at 0% (below inflation) for RPU electric. We actually lowered the Customer charge for 2020, which has been a goal of mine for a long time because it better rewards conservation. The 2nd component is a “per kWh” energy charge. This is higher in the summer than winter. In general, Electric charges can only go to Electric related expenses.
RPU is moving to 100% renewable energy when out contract with SMMPA expires in 2030. I have been a leader in this initiative and am committed to climate action. Contrary to what you might expect, electrics costs will be stable to lower as a result of this.
There are also 2 components to the RPU water bill, a fixed customer charge and a variable usage charge. Water rates did increase from 2019 to 2020 a small amount. I don’t recall the percentage, but in general our water rates are among the lowest in the nation. In general, water charges can only go to water related expenses.
I was also involved in putting in place “inverted block rates” meaning that as usage increases per unit costs go up. This again is a national best practice that rewards conservation of this precious recourse. Almost every conservation minded family will never leave the cheapest tier of rates.
The Stormwater Utility is on the RPU bill for convenience and efficiency, but a City of Rochester Public Works function. The Stormwater utility collects funds that address issues related to controlling and cleaning surface water. This includes maintaining stormwater ponds, addressing street flooding, and dealing with erosion along drainage ways. The ultimate goal is to keep out waterways clean & healthy. This is a utility that climate change is having a real effect on. The storms that we get now frequently dump more water over a shorter period of time.
I believe these fees change on Jan 1. In general, stormwater charges can only go to stormwater related expenses.
Sewer (Waste Water)
The Sewer Utility is on the RPU bill for convenience and efficiency, but a City of Rochester Public Works function. This fee currently pays for the wastewater treatment plant, collection sewers, and as a subside for new development. I have opposed the later for more than a decade. The Sewer rates are set by the council for multiyear periods after extensive rate studies are performed. I believe these fees change on Jan 1. In general, wastewater charges can only go to wastewater related expenses.
An important change that we made in 2020 is that we created different Sewer access charges for different future “sewersheds” in the City. Where as the sewer utility has been used to subsidize new sewer development for decades, sewer access development charges will now have to cover those expenses. In short we are ending the practice of subsidizing suburban sprawl with this fee.
This is an expensive utility because the city of Rochester is the same geographic size of Minneapolis or St. Paul but with a small fraction of the tax base and population. This is a good example of how sprawl makes a community poorer.
This fee also considers some upgrades that will be required at our Wastewater Treatment plant. This is largely to meet the need to better clean phosphorus out of our waste water. The cost of required changes will exceed $100 million over 3 phases.