BWP BOOSTS POWER RATES BILLS TO GO UP 10% MORE.

Byline: Helen Gao Staff Writer

BURBANK - A little less than two months after adopting a 10 percent electricity rate hike, the City Council approved another 10 percent increase, effective Oct. 1, to cover a $23.6 million shortfall Burbank Water and Power is facing this fiscal year.

The rate hike, approved during Tuesday's council meeting, will mean the monthly bill of an average residential customer, using 500 kilowatt hours per month, will increase by about $6 - from $57.49 to $63.44.

Disabled, senior and low-income residents who qualify for the city's Lifeline program, however, might be exempted from the rate increase.

Noting the hardship the hike might pose for Lifeline customers, the council has directed staffers to investigate using funds from the public benefits charge account to provide a greater subsidy to those customers to offset the hike.

Every BWP customer pays 1.85 percent of his or her electricity charges to the public benefit charge account, which funds a variety of conservation and other energy-related programs. The city has about 4,500 Lifeline customers.

``I think Lifeline customers are really restricted in terms of their income,'' said Councilwoman Marsha Ramos. ``They bear a burden that they feel is very significant. I am very sensitive to that.''

The hike is expected to generate $9.6 million in revenues for the BWP to offset the deficit. The city will cover the remainder of the shortfall by withdrawing $14 million from the Rate Stabilization Fund - money the BWP has saved over the years from power sales to cushion customers from drastic rate increases.

``We have no choice. There are factors that are out of our control,'' said Councilwoman Stacey Murphy.

One major factor leading to the hike, city officials said, is price caps imposed on the western United States wholesale electricity market by the Federal Energy Regulatory Commission since June 18.

Due in part to these price caps, Burbank estimates its wholesale revenues will only total $60 million this fiscal year, compared with the initial forecast of $166.1 million.

Ron Davis, BWP manager, also blamed the cool weather spells this summer that have created a glut of surplus electricity sold at significantly lower prices than previously.

``Costs (of generating electricity) are coming down, but our wholesale revenues have come down even more,'' Davis said.

The BWP's costs of buying electricity wholesale was initially forecast at $120.1 million for this fiscal year. Now the figure has been revised to $56.5 million, thanks to lower natural gas prices.

Davis said his staff is working to lock in lower natural gas prices so in the next few years the city will have its costs under control.

``Whenever prices are low, we plan to continue buying forward,'' he said. ``Over time, the lower costs will be passed to our customers.''

Based on city staff projections,the city will continue to face a deficit of about $10.7 million in fiscal year 2002-03, without the 11 percent hike. With the hike, the year is forecast to end with a $2.8 million surplus.