Bigger electric bills were on the minds of the Chaska City Council Monday night as it reviewed the five-year forecast for the city’s electric utility during a work session.

Councilor Jay Rohe remarked that he had a $400-plus bill last month – the highest his family had ever seen.

Interim City Administrator Matt Podhradsky said he wasn’t the only one, noting that energy production costs were on the rise, causing energy adjustment clauses to jump in response. The city sets a base rate for its customers, but passes through the costs of increased energy production via an “energy adjustment clause.”

“Energy adjustment clauses are a more significant expense to customers,” said Podhradsky. “They’re driven from the increase in the raw cost to produce energy.”

Podhradsky added that the city neither makes nor loses money on energy adjustments.

Podhradsky said that despite a decrease in residential development, the city has seen increased electrical usage among its customers – most likely due to increased technology uses.

In 2007, Chaska generated $27 million in revenue from its electric utility. Of that, 67 percent of the use came from industrial, 25 percent from residential and 8 percent from commercial/other.

A good portion of that revenue is used to pay down debts on city projects like the new fire station, the community center and The Lodge addition. The council is also looking ahead to a $2 million project slated for the Chaska substation in 2010.

Other plans for the electric utility include adding a line crew in 2010 and a utility billing account clerk in 2009. The city anticipates increasing base electric rates by 2.25 percent annually, a slight decrease from the 3 percent raise anticipated last year.

Community center

The council also took a look at the five-year forecast for the Chaska Community Center.

Podhradsky reported that they had seen membership at the community center take off in recent years. It now accounts for 30 percent of the center’s revenue.

Podhradsky said that the increase was likely attributed to the Wellness Center and Lodge additions, as well as partnerships with health insurance programs to offer discounts for regular use.

The community center also gets a healthy chunk of its revenue from the ice arena rental, Podhradsky said. But despite making strides in membership and rentals, the center still requires city funding annually.

“The community center has always run lean,” said Podhradsky.

Chaska.net

After a rough start, Chaska.net is triggering fewer calls from dissatisfied users, Podhradsky reported, calling it a good sign.

The city kicked off the wi-fi Internet service in 2004. It currently serves 2,240 residential customers.

Podhradsky said the city had invested about $3.3 million in developing fiber and wireless services - $900,000 of that is fiber technology that they’d consider building on.

Podhradsky said that in the coming years, the council would have to decide whether or not the city should stay in the Internet business, citing concerns of increased cost.

In 2007, Chaska.net generated nearly $870,000 in revenues. Expenses for the utility were $1.34 million. Future expenditures include a third full-time employee and general network maintenance.

The city hopes to increase revenue by adding 250 to 350 customers annually while upping the rate by $1 a year until it reaches a maximum cost of $20.99 per month for residential use. The city also plans to increase its service with commercial/industrial growth and the BioTech Center.

-Mollee Francisco, staff writer