Cedar Hill water/wastewater and gas rates go up slightly

by Steve Snyder of TODAY Newspapers

The Cedar Hill City Council approved a 2.65 percent increase, or $1.96 for the typical residential user, at its Aug. 26 meeting.

CEDAR HILL — Cedar Hill residents will see a slight increase in water and wastewater rates next year. The Cedar Hill City Council approved a 2.65 percent increase, or $1.96 for the typical residential user, at its Aug. 26 meeting.

Meanwhile, the council approved a negotiated rate increase for natural gas rates with Atmos Energy. The agreement represents a 35 percent reduction in Atmos' original request and will cost the typical residential gas customer 81 cents a month.

Later in the meeting, the council raised the franchise fee for Atmos, the amount it charges Atmos to do business in the city, from 4 to 5 percent of its gross revenues.

Meanwhile, the council is trying to get a long-term handle on city-use electric rates.

In a briefing session before its meeting, Assistant to the City Manager Melissa Stephens had a presentation to the council about renewal.

The city will have an electric bill of $1.5 million for the current year, Stephens said. That includes traffic signals, streetlights and electricity to run the city's water and sewer systems and other things as well as electricity in city buildings. Cedar Hill is a part of Cities' Aggregation Power Project, which looks for long-term utilities contracts for member cities.

Stephens explained that 60 percent of the city's need would be at a base rate of 8 cents per kilowatt-hour and 40 percent on a more fluctuating rate, at natural gas market rates. The city's current, shorter-term contract prices 100 percent of its electric power at 10.8 cents per kilowatt-hour.

She said a new 24-year contract could save the city about $180,000-$320,000 per year. A long-term contract would also help flatten current volatility in the natural gas market. Natural gas is the primary electric generation source in Texas.

Stephens said the city would need to adopt an ordinance to sign off on CAPP's contract agreement, and pay membership fees, by Oct. 16. In the Best Southwest area, Duncanville and Lancaster are also member cities.

Deputy City Manager Greg Porter said that CAPP would have to issue $2.8 million in debt as an up-front payment for the contract.

Councilman Wade Emmert noted that the city of Cedar Hill would have to pay interest on its share of that debt. Finance Director Hardy Browder explained that was factored into the base rate of 8 cents per kilowatt-hour.

Emmert then asked why the city was switching to a long-term contract, and why it was 24 years. Stephens said the city could only lock in the rate deal with a long-term contract, and 24 years was the only length offered.