‘This is a very hard pill to swallow’: Electric costs could rise 40% for Fairfield residents

The bad news: rates could increase as much as 40 percent when the one-year contract expires at the end of May.

His comments came during council’s first discussions this week on a new aggregate electric contract.

In November 2023, Fairfield residents voted in favor of starting both electric and gas aggregation programs.

On Surace’s recommendation, the city signed a one-year contract with Dynegy in February 2024 to be the supplier for the program, which allowed residents to opt-out if they chose.

In his presentation on options for a new electric contract, Surace said those enrolled in the electric program collectively saved $1.72 million over an eight-month period, or an average of $151.15 per household.

When Energy Alliances asked for bids from four suppliers, it received two responses – Dynegy and Constellation, whose rates ranged between 8.71 and 8.74 cents per kilowatt of electricity used.

That compares to the current Dynegy rate of 6.17 cents per kilowatt of electricity.

Although Duke’s default rate for June is unknown, Surace said it is estimated to be in the range of 9.7 cents to 10 cents per kilowatt of electricity.

“The bottom line is our residents’ (electric rates) are going up 40 percent,’’ said Councilman Tim Meyers. “This is a very hard pill to swallow. A 40 percent increase is a big deal.”

As a comparison, the city also shops for its electricity to power its water and wastewater plants along with street lights, said Adam Sackenheim, the city’s assistant city manager.

Those costs went from 4.09 cents per kilowatt hour a year ago to 6.08 cents now and an anticipated rate of more than seven cents per kilowatt hour by year’s end.

“That’s a 48-49 percent increase,” Sackenheim said.

Surace said the next auction for electricity that Duke could participate in is March 18, followed by an April 15 auction.

Those results could determine whether it’s in the city’s best interest to sign a contract with a bidder or revert to Duke’s default rate.

Council directed staff to prepare legislation for its Feb. 24 meeting that would give the city manager the authority to sign a one-year contract provided it did not exceed a certain amount.

That said, Councilman Meyers would give the city the flexibility needed to accept an offer between council meetings. Council will be updated on the situation during the meeting and ensuing discussion.