Safford Council OKs reserve use to offset increased power costs

This chart, prepared by the consulting firm of K.R. Saline & Associates, shows the rising cost of natural gas over the past 30 months. - Contributed Graphic/City of Safford

SAFFORD —During Monday’s meeting, the Safford City Council voted 4-3 to use $1.3 million in reserves to cover in part the increasing cost of acquiring electrical power.

In addition, the city’s Utilities Division will also increase the purchase power adjuster rate charged to customers by 5.5 cents, to cover the remainder of the increased power costs. The result of the higher PPA will be an increase in billing to the customer of about $23.55 per month.

Almost 94 percent of Safford’s electricity comes from natural gas, and natural gas prices have increased more than 400 percent over the last three years.

“Fortunately for us, we have enough reserves where we can soften that blow,” said City Manager John Cassella. “So, again, the scenario that we’re presenting tonight, no matter how you unfold this, has minimal impact on the customer relative to what it would have otherwise been.”

Voting in favor were Vice Mayor Richard Ortega, and Councilmen Brad Hemphill, Steve McGaughey and Gene Seale. Voting in opposition were Mayor Jason Kouts, and Councilmen Michael Andazola and Arnold Lopez.

Utilities Director Jason Brimhall explained that the city is taking steps to avoid the volatility of the natural gas market in the future by diversifying its power purchases. In about three years, the city will get about 64 percent of its electricity from natural gas, about 6 percent from hydroelectric generation and about 29 percent from a solar-generating plant expected to come online in 2025.

Brimhall added that a full rate study of all Safford utilities — natural gas, electric, water and sewer — will take place in Spring 2023.

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