Enumclaw residents and business who pay for the city’s natural gas should expect a utility rate hike in the near future, and additional increases in following years.

An ordinance about the rate increase was introduced to the city council during its Feb. 28 meeting for first reading; the council will likely vote to pass or reject the ordinance during the March 14 meeting.

According to city documents, Enumclaw has been slowly decreasing its natural gas rates for more than a decade through “gas hedging” (which is basically securing future natural gas contracts in order to keep current prices low), reducing the rate from $1.12 per therm (100 cubic feet, or 1 CCF, of natural gas) in 2007 to 87 cents in 2020.

The council increased the natural gas rate 2 percent in 2021 to cover lower revenue projections.

However, a recent rate and charge study performed by Utility Financial Solutions found the city has become too dependent on natural gas sales, rather than fixed costs of service, negatively affecting the city’s natural gas enterprise account (a city fund that can’t make money — it must acquire just enough revenue to cover expenditures)

Although Enumclaw’s customer base has increased by 25 percent since 2008, said Enumclaw Public Works Director Ed Hawthorne in an email interview, “the load per customer has decreased” for two reasons.

First, updated Washington state building and energy codes have led to contractors opting to install electric heat pump equipment, rather than gas-fired appliances, for space and water heating in local developments.

Second, general efficiency increases in home structures, appliances, and other equipment that use natural gas have also resulted in a decrease of city revenue.

So, in short, UFC recommends raising the fixed service cost of natural gas as well as the volumetric charges in a way to better balance Enumclaw’s natural gas enterprise account’s revenue.

WHAT THIS MEANS FOR YOUR WALLET

In order to meet the city’s natural gas fund’s balance requirements, Enumclaw is looking to increase its utility revenue by 6.3 percent, starting April 2022.

To achieve this, residential natural gas customers would see their monthly service charge (a fixed fee) increase $3.22, from $8.12 to $11.35.

Additionally, the volumetric gas rate would rise 3 percent, from about 84 cents to approximately 86 cents. For the average homeowner, who uses 84 therms per month, costs would rise from $70.56 to $72.24.

Finally, on top of everything is a 6 percent utility tax.

All together, these increases work out to the average residential natural gas customer’s bill rising from around $83.40 to about $88.60, roughly $62.40 extra a year for an annual bill of $1,063.

But that’s just for the rest of this year; additional rate hikes of 2.5 percent will be implemented for 2023 through 2026. Hawthorne said he will be recommending that increase for both service charges and volumetric charges.

If the council approves those increases, the average monthly bill for the next four years may rise to $90.80 in 2023 (for an annual bill of $1,090); $93.07 in 2024 (annual bill of $1,117); $95.40 in 2025 (annual bill of $1,145); and $97.78 in 2026 (annual bill of $1,173).