Understanding Boulder City’s electrical rates

“The city held rates as low as it could for as long as it could.”

This line from a recent presentation sticks out as the most important piece of information for residents to remember.

Boulder City has experienced six power outages since summer started in June. Most of these have been limited to pockets of several dozen homes and businesses at a time, with power coming back on within five hours or less. Our crews work quickly and safely to restore power. But aging infrastructure can – and does – fail, unless it is upgraded or replaced. Here are some reasons the electrical dilemma exists in Boulder City.

Utilities Funds are Separate from City Funds: Boulder City Utilities operate as an Enterprise Fund. State Law (NRS Section 354.517) defines an enterprise fund as any municipal operations that run in a manner similar to a private business, where the governing body intends the expenses of providing the service to be recovered primarily through charges to the users.

Electric, water, and wastewater receive no property tax or sales tax support. Every dollar that maintains these systems comes from the people using the service. The city can’t use money from property taxes for utilities. In addition, the City Municipal Code prohibits the city, its agencies and enterprises from incurring any new debt obligation of $1 million or more without the approval of Boulder City voters in a general or special election.

Power comes with a cost: Contrary to the beliefs of some residents, Boulder City does not get “free power from Hoover Dam.” The city has a long-term contract to buy hydroelectric power through the year 2067, but rates fluctuate. Additional power agreements include access to power from Salt Lake City Area Integrated Projects, Townsite Solar, and Silver State Energy Association. There are also costs for transmission of energy, equipment administration and crews, such as linemen.

Antiquated equipment: Every one of the city’s six substations runs on equipment that ranges from three to seven decades old. Substation 1 is the oldest substation, with two remanufactured transformers from the mid-1970’s, one on a 1950’s-60’s core. The transformers at substation 2 are 1990’s vintage. Both use 4,160V breakers that use 1950’s current-interrupting technology, which are hazardous for crews to work on.

Substation 3 is a bit more modern, but the same basic style with inherent hazards: one transformer and breaker gear, both 1970’s vintage. That substation is being replaced now to carry far more capacity. Once complete, substations 1 and 2 will come out of service.

Substation 4 was built in the 1980’s using more modern technology than substations 1–3, but still, that technology is about 50 years old now. The city needs to upgrade to allow for routine maintenance and equipment bypass, cutting outage time.

And it’s not just about the substations. The poles, conductors, and underground vaults that carry power to every home in Boulder City are wearing out too. The five-year plan includes distribution upgrades, circuit ties, and meter replacements. All told, the five-year plan will cost $37.1 million.

Rate study: City staff recently completed a rate study with advice and support from FCS, a firm that specializes in analyzing public utility systems, rates, and funding mechanisms. FCS recommended Boulder City increase utility rates five percent each year for the next three years to ensure that adequate funds are available for needed equipment upgrades and to cover increasing costs of goods and services. The City Council will consider this increase later this month. If passed, the average increase in residential electricity rate is less than $7 a month for an 1,800-square-foot home in year one.

There are several programs that can help those on fixed incomes. For example, the state Energy Assistance Program can save qualified recipients as much as 35-percent a month on their energy bills. Currently, 2.3% of our roughly 6,800 residential customers participate in this program.

Lowering your energy use can also help. Installing smart thermostats, smart irrigation controllers, or energy-efficient air conditioners can cut costs. These items even have available rebates – visit www.bcnv.org/rebates for details. Consider contacting HELP of Southern Nevada for weatherization programs at www.helpsonv.org/weatherization. Other measures to reduce energy costs can be found at www.bcnv.org/SaveEnergy. They include:

Turn off lights and appliances when not in use.

Close doors and vents to rooms that are not being used.

Set the thermostat to 78-80 degrees when home and 5 to 10 degrees warmer at night or when you’re not home.

Keep air conditioning on during the hot months, even when you’re not home. Your house will store up the heat and air conditioning may take hours to feel comfortable.

Run full loads in your washing machine.

Use energy saver option on your dishwasher, allowing dishes to air dry.