Town Talk: You ask, we answer
Editor’s Note: The City of New Ulm presents a weekly column highlighting activities in different departments in the city government. Once a month the city will answer questions from readers. Questions on New Ulm city issues can be sent to comments@ci.new-ulm.mn.us.
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Q – My NUPUC utility bill seems high; how do New Ulm’s utility rates compare to other area communities?
A -New Ulm utility rates compare favorably with those of area cities. PUC staff participate in various utility rate studies on an annual basis which indicate our rates are quite competitive. New Ulm is somewhat unique in that many utility costs are contained on one billing statement, from electric and gas to sewer and water. In communities without municipally owned energy utility systems, residents will typically receive three separate bills: one combined bill from the city government for sewer and water and individual bills for electric and natural gas from the privately owned energy utility systems. When comparing your overall utility bill to those from your friends and family in non-municipal utility communities, it is important to add the cost of the individual bills to have a true comparison of the overall cost of service.
New Ulm’s water and sewer rates are average compared to other Minnesota communities. The consulting engineering company AE2S produces an annual rate study of water and sewer systems throughout Minnesota and the Dakotas. For Minnesota communities, the average water and sewer rates for similar water systems in the most recent publication indicates an average monthly residential water bill ranges from $10.91 per month to $56.37 per month. The New Ulm average residential water rate is listed in the study at $37.51/month. For wastewater, the average monthly bill reported in the study ranges from $12.80 to $55.95 per month. The New Ulm average wastewater bill is listed as $35.32 in the study.
Benchmarking electric rates, New Ulm takes part in a semi-annual comparison with 14 southern Minnesota electric utilities organized by Owatonna Public Utilities. This electric rate comparison lists the average annual residential expense at $992 per year with a range of $766 to $1,333. A larger survey is completed by the American Public Power Association (APPA) which collects data from all private, municipal and cooperative utilities. The range of municipal and cooperative electric rates in the state of Minnesota has a low range of $395.25 per year and a high range of $1,356 per year. New Ulm’s residential customers average $1,067 annually in the APPA rate study. New Ulm’s electric rates have been steady for several years with the last increase occurring in 2012. This Owatonna sponsored rate study also examines gas expenses with an average residential annual gas expense of $684 per year in 2015 with a range from $610 to $787. The New Ulm average residential gas expense for 2015 was reported at $666.
There are several factors that influence rates from community to community. For water and wastewater, the major factors are availability of plentiful surface and ground water resources. For electric, the availability of federal Western Area Power Administration (WAPA) power supplies and access to low-cost generating resources and transmission lines are important factors. Natural gas prices are influenced by access to non-constricted transmission pipelines and gas futures purchasing policies. The challenge of meeting system demands with differing degrees of available resources contributes to the differences in rates between communities. The staff of the NUPUC is continually striving to produce competitive rates while ensuring reliable supplies.
The other half of the equation in the cost of utilities is the volume of product utilized on a monthly basis. NUPUC offers a number of energy equipment rebate programs and auditing services to help our customers conserve and use energy wisely. For further information, please review the documents available at www.nupuc.com.
Prepared by Patrick Wrase, Utilities Director
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