Signs direct visitors at the City of Seward’s city hall annex on Sunday, Nov. 28, 2021, in Seward, Alaska. (Ashlyn O’Hara/Peninsula Clarion)

Signs direct visitors at the City of Seward’s city hall annex on Sunday, Nov. 28, 2021, in Seward, Alaska. (Ashlyn O’Hara/Peninsula Clarion)

Seward electric rates to increase by $0.06 per kilowatt hour Jan. 1

Seward twice in 2023 voted not to sell the utility to Homer Electric Association

The average Seward Electric residential customer will pay $36 more per month for electricity starting Jan. 1 following a rate increase approved by Seward City Council members on Monday. The resolution approved by council members Monday increases rates by $0.06 per kilowatt hour.

The increase comes as the city stares down upcoming expenses related to deferred maintenance, state-mandated cybersecurity upgrades, the need for additional staff resources and inflationary impacts associated with its electric utility. Seward twice in 2023 voted not to sell the utility to Homer Electric Association: first during a special election in May and again during the city’s regular election in October.

Council members first considered the proposed $0.06 per kWh increase during their Nov. 13 meeting but postponed their vote until their December meeting. Multiple members of the public during both meetings asked that council members consider a smaller increase, such as the amount proposed by the Seward Electric Ad Hoc Committee, which recommended a $0.017 per kWh increase.

The $0.06 per kWh amount approved Monday came from a rate study conducted for the city by Financial Engineering Company’s Mike Hubbard earlier this year. In the event that the city’s utility sale failed, that study recommended a $0.06 per kWh increase for all customers for the city to meet its future revenue targets.

For Seward Electric’s average residential customer, who uses 600 kWh per month, a $0.06 per kWh increase would increase their monthly payment by $36. Across all types of utility customers, the increase would generate about $10.6 million in new revenue for the city in 2024. The council directed the city to explore a program that would provide a rate reduction for low-income households.

Council members on Monday debated the pros and cons of implementing the $0.06 per kWh increase all at once versus implementing two $0.03 per kWh increases over a longer period of time. Some said two separate increases would allow the city to ease into the change, while others said delays would be putting off the inevitable.

Council member Robert Barnwell said that the full $0.06 increase would just provide the necessary revenue, arguing that if the city is going to implement a rate increase it should not do so halfway.

“According to Mike Hubbard, a $0.06 increase barely gives us any margin for error, or just a barely acceptable margin,” Barnwell said. “When we say that we can go to two or three cents, to me I think it’s irresponsible and negligent and it misleads the public.”

Seward Vice Mayor John Osenga had similar thoughts, saying that breaking the increase up would mean “pushing the can down the road.”

“We need to do what we need — what I feel like — we need to do,” Osenga said. “If it’s been recommended and argued for by a professional — and as far as I know, administration is kind of saying ‘Yes, do a $0.06 increase’ — then I just would feel kind of odd going against recommendations of professionals at this point.”

Council member Mike Calhoon was one person who said the city should consider two smaller increases and then evaluate after the first increase whether another is actually needed.

“I personally would feel better if we just sequenced it a little bit,” Calhoon said. “If we do an increased, get it set but then really start to look and see what our budget really is because some of the things we’re talking about are sort of speculative.”

Council members discussed, but ultimately voted against an amendment that would have implemented two $0.03 increases by a vote of 5-2. The rate increase was similarly approved by a vote of 5-2, with council members Mike Calhoon and Kevin Finch voting in opposition.

Monday’s Seward City Council meeting can be streamed on the city’s YouTube channel.

Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.

More in News

The Kenai Peninsula College main entrance on Aug. 18, 2022, in Soldotna, Alaska. (Jake Dye/Peninsula Clarion)
Chiappone and Dunstan to speak at the KPC Showcase

Kenai Peninsula College continues its showcase with two new speakers this week and next

U.S. Rep. Mary Peltola, D-Alaska, talks about issues of concern regarding the proposed merger of supermarket chains Kroger and Albertsons during a floor speech in the House chamber on Wednesday. (Screenshot from official U.S. House of Representatives video feed)
Begich leads in early results, but Alaska’s U.S. House race won’t be immediately decided

About 245,000 ballots had been counted by 11:32 p.m., and Peltola trailed by about 5 percentage points

The Alaska governor’s mansion on Wednesday. Gov. Mike Dunleavy is considered a contender for a post in Donald Trump’s second presidential administration. (Mark Sabbatini / Juneau Empire)
Election summary: Trump wins, GOP takes over U.S. Senate, Alaska may get new governor

Begich and repeal of ranked choice voting narrowly lead; GOP may lose control of state House.

Nesbett Courthouse in downtown Anchorage on Oct. 7, 2024. (Yereth Rosen/Alaska Beacon)
Voters line up at the polling site at Anchorage City Hall on Nov. 4, 2024. City Hall was one of the designated early voting sites in Alaska’s largest city. It is not a designated site for Election Day voting. (Yereth Rosen/Alaska Beacon)
Alaska Republicans lose two seats in state House, increasing odds of leadership switch

Rural Alaska precincts had reported few results by 11:30 p.m. Tuesday night.

Donald Trump won or was leading as of Wednesday morning in all seven swing states in the 2024 presidential election. (Doug Mills / The New York Times)
Donald Trump returns to power, ushering in new era of uncertainty

He played on fears of immigrants and economic worries to defeat Vice President Kamala Harris.

A voter is handed as ballot at Woodworth School in Dearborn, Mich., on Tuesday, Nov. 5, 2024. One of the most consequential presidential elections in the nation’s modern history is well underway, as voters flocked to churches, schools and community centers to shape the future of American democracy. (Nick Hagen/The New York Times)
Trump verges on victory, picking up Pennsylvania

Donald Trump has captured Pennsylvania, the biggest prize of the seven battleground… Continue reading

Signs and supporters line the Kenai Spur Highway in Kenai, Alaska, on Tuesday, Nov. 5, 2024. (Jake Dye/Peninsula Clarion)
Update: Unofficial results for the 2024 general election

Preliminary, unofficial election results as of 9:55 p.m.

Poll worker Carol Louthan helps voters submit ballots at the Soldotna Regional Sports Complex in Soldotna, Alaska, on Tuesday, Nov. 5, 2024. (Jake Dye/Peninsula Clarion)
Update: Bjorkman, Ruffridge, Elam and Vance lead in election night results

Several residents said that they came out to vote because they knew this election was “a big one.”

Most Read