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City of Newark, DE to Raise Electric Rates

City of Newark, DE to Raise Electric Rates

The Newark City Council is moving toward an increase in electric rates as a way to deal with a $4.6 million revenue shortfall.

The move came on Monday night as the Mayor and City Council hosted a budget workshop aimed at addressing financial challenges facing the municipality.

Councilmen viewed the 2010/2011 financial forecast for governmental funds, the 2011 Capital Improvement Program for governmental funds, and the possibility of cutting city services and programs to reduce the budget shortfall.

An increase in the electric rate will come up for a vote in an upcoming council meeting.

City Finance Director Dennis McFarland suggested to the council that the electric rate hike be increased from an additional $.017 per kilowatt hour to $.026 per kilowatt hour to help ensure that the utility budget goal of $4.6 million is met.� Due to a cool summer, last year's electric consumption was down considerably from years past, thus creating a shortfall in city revenues.� By instituting the increase as early as May, McFarland told the council that the revenue goal could be met for the year.

He also stated that the increase will only be used to ensure that revenue levels are met and that the rate could be adjusted downward when consumption reaches normal, anticipated levels.� The average household would see an increase of about $12 per month at the new rate.�

With the increase, the Newark rate would be on par with New Castle County residential electric rates.� McFarland cautioned that if the rate hike does not go into effect, an additional $4.6 million would need to be raised or an equal amount would have to be cut from the operating budget.