Healdsburg’s electric rates to increase. Here’s what customers can expect

The cost of power for Healdsburg Electric’s 6,163 customers is going up.

City Council, in a 5-0 vote on June 5 , approved an incremental rate that will start in November and continue through 2027 to offset increased expenses associated with inflation, officials said, adding that it will be the first such hike since 2019 before the pandemic began.

For the average single family home, which uses about 484 kWh per month, monthly electric rates will rise by about $11.50, or 15.9%, in the November billing cycle.

The monthly bill for a multifamily home with average monthly usage of 272 kWh will rise by about $4.50, or 10.3%.

The rates for all users will increase each year by roughly 10% to 12% until the end of the 2026-27 fiscal year, according to city staff reports.

The utility is experiencing higher costs associated with energy procurement, operation and maintenance, transmission, and capital improvement projects, Terry Crowley, Healdsburg’s utilities director, said during the June 5 City Council meeting.

The rate changes are also a bit of a “catch-up,” Crowley added, and will help replenish the city’s reserve revenue by fiscal year 2026-27 after a planned deficit for the coming fiscal year, which will begin July 1.

Healdsburg operates its own electric utility, Healdsburg Electric, and generates energy through a variety of sources to include geothermal, hydro, natural gas and solar.

About 38% of Healdsburg’s electricity comes from the Geysers Geothermal Plant. The next largest source, or 18%, comes from the Lodi Energy Center followed by 8% of energy from the city’s Floating Solar Project.

The rate increases were proposed due to revenue shortfalls in the city’s electric, water and wastewater funds that are predicted through the end of the third quarter, according to a presentation made to City Council last month by Healdsburg Finance Director Katie Edgar.

The city’s electric fund revenue was down by 6% or $9.01 million.

The “gradual” yearly rate increases, which would end in 2027, would replenish revenues “to fund operational costs, complete planned capital replacements, and re-establish reserves,” according to a staff report.

Capital improvement projects worth $1.6 million have been delayed in the hopes of diminishing their fiscal impact on the latest rate increases, according to staff reports.

The rate increases, however, will fund $6.9 million worth of projects related to undergrounding on Grove Street and Healdsburg Avenue and seismic retrofitting of the Badger Substation.

The most notable jump in consumer costs will come in the increase to the monthly customer charge each year.

Customer bills are made up of a monthly charge, usage and taxes.

The single family residential customer’s monthly charge will increase from the current $6.38 rate to $9.34 in November. It will continue to increase each year for the next four years until it reaches $24.45 per month by June 30, 2027.

For multifamily customers, that charge will be $6.07 in November and later reach $14.67 per month by June 30, 2027.

The monthly rate for small commercial customers will be $29.82 and $121.93 for large commercial customers starting in November.

“That structural change in our rates puts more of our cost recovery into that fixed monthly charge and slightly less into the per unit or per kilowatt-hour charge,” he said. This will help cover fixed costs related to maintaining service to customers, he said.

From now until June 30, 2027, the single family monthly bill with average usage will increase by about $24.42 to about $96.63. That’s a 33.8% increase.

The monthly bill for a multifamily home with average usage will increase by about $11.66 to $55.03, or a 26.8% increase.

“Extreme inflation, energy market volatility, and desired community improvements necessitate rate increases to ensure (electric) fund stability,” according to a staff report.

As part of the new electric rate plan, staff added a multifamily rate.

It will have a lower monthly charge for customers who live in an apartment or shared space, said Amber Gschwend, managing director of EES consulting, which was hired by the city to do the cost of service analysis and rate study.

The new plan will also remove a third tier from the pay structure, because of less than 2% usage within that tier, Gschwend said. The change to two tiers will ease the transition to time of use rate, she added.

Time of use rate, which the city already offers, allows residential and commercial customers who mostly consume energy outside of peak hours to pay a different rate.

Healdsburg Electric customers can also opt for the Green Rate, where the city will get renewable energy to match the customer’s monthly consumption. The city also offers the CARE program, which offers a 25% energy bill discount for qualifying low-income customers.

Currently, Healdsburg’s electric rates are about 45% less than PG&E and Sonoma Clean Power rates, according to the city website.

Sonoma Clean Power rates increased its rates in February while PG&E customers’ electric bills skyrocketed last winter.

Though Healdsburg customers will pay less than other Sonoma County residents, Healdsburg residents spoke against the rate increases Monday night.

Vice Mayor David Hagele summed up the council’s stance at the June 5 meeting:

“I think, like everyone else, we don’t like that rates are going up. However, I think the key phrase I saw in the presentation was ‘revenue required,’” he said.

He reiterated what Crowley said earlier — this is a Healdsburg-owned utility, not a for-profit entity like PG&E.

“The revenue required is based on a budget that we passed, which included reserve requirements, which are our goals, capital improvements that we need,” he said. “ … then, finally, ensuring that we have reliable power that is available to our community. So, here’s the cost to achieve that.”

You can reach Staff Writer Jennifer Sawhney at 707-521-5346 or jennifer.sawhney@pressdemocrat.com. On Twitter @sawhney_media.