Effective February 1, 2023, Lehi City Power has implemented a purchased power adjustment clause fee (PPAC) for residents and businesses of $0.017. All energy use for residential and commercial will have the PPAC applied to their bill. In addition to the PPAC rate, residents will continue to pay the $2.50 monthly customer charge that was put in place July 1, 2022. The monthly charge will increase to $5.00 in July 2023, $7.50 the following year and then $10 a month starting July 2025. This monthly charge is used for all customer support services.
We understand the impact this has on our residents and assure that every effort is being made to keep rates down. Factors such as wholesale prices, the demand for natural gas, and weather conditions have forced Lehi City, along with others in the state and country, to make the tough decision to raise rates. While the City owns the infrastructure to provide power to Lehi residents, the wholesale cost of power accounts for more than 70% of Lehi’s operating expenses. Because the wholesale cost of power has increased rapidly with changing market conditions, Lehi City’s wholesale power costs have increased rapidly as well.
With the rate increase, Lehi City has managed to stay on the low end of the residential rates at an average of $0.11 kilowatt hour (kWh). The average residential electricity rate in Utah is $0.13 kWh, which is 44% lower than the national average of .23kWh.
The Power Department is constantly looking for solutions and preparing for the future by studying all options, including increasing generator usage, solar power, and new regional projects. The City has found various ways to avoid increasing rates, including building the Broadbent Generation Facility in March 2018. The facility has three Cat G3520H generator sets that produce 7.2 MW of power during times of peak demand, when energy prices are high.
Why did the rate increase?
Factors such as wholesale prices, the demand for natural gas, and weather conditions has forced rate increases across the country.
What is PPAC?
Many utilities employ a rate mechanism known as a Power Purchase Adjustment Clause (PPAC) to automatically adjust retail rates to reflect wholesale power fluctuation. If wholesale costs are higher than expected, retail rates are automatically raised and if lower than expected retail rates are automatically lowered.
How can I off set my bill?
- Raise thermostat in summer by 5 degrees.
- Adjusting thermostat temperature a few degrees can lower your monthly bill.
- Unplug “vampire” appliances (i.e., cable boxes, toasters, coffee makers, etc.)
- Newer appliances are more efficient.
- Change air filter regularly.
- Proper insulation and updated windows may also help reduce costs.
Are there financial assistance programs available?
What rebate programs are available?