City Council to Consider Increasing Utility Rates – All Electric Rate also in Play

The Aspen City Council will consider utility rate increases during budget discussions in October.

Staff have based their recommendations to increase the rates on a study completed this year by Raftelis, a consulting company specializing in local government and utility management. The study, completed over a nine-month period, concluded that the city will need to raise both water and electric rates to cover rising costs.

The city’s average residential customer could see increases in the vicinity of $19.54 for monthly electric bills and $5.25 for monthly water bills. These increases would differ depending on the customer’s location and property (Red Mountain customers, for instance, could see a $53.20 increase in their water bills due to pumping costs).

Staff also will recommend the creation of a special “All Electric Rate” for building owners and homeowners who fully electrify their properties. This low rate is meant to encourage them to electrify their gas heating systems, said to be the largest source of greenhouse gas emissions in most Aspen buildings.

According to the Raftelis study, the rate increases reflect pressures in today’s markets. The study states that ongoing inflation and supply chain issues have driven up prices for utilities across the country, including Aspen.

The study cites a survey by the American Waterworks Association, in which 70% of utilities said rate increases are their main way to cover rising costs.

City council members generally were muted in their response to the presentation, though Mayor Torre did tell staff that the council is “sensitive to all rate increases.” He said that come October, he will be focused on making sure the “smallest users feel the least impact.”

In addition, Councilman Bill Guth asked several clarifying questions about the staff’s presentation. Guth wondered if Aspen’s utility rates are not already abnormally high, though city staff assured him that Aspen has normal utility rates when compared to other communities.

Guth also wondered if city staff should incentivize building owners and homeowners to go all-electric by modifying “tap fees,” which are paid when new water or electricity connections are added to the city’s grids. Staff said they will recommend increases in tap fees both for electricity (15-20% increase) and water (8% increase), but that incentives for full electrification are not part of the recommendations. 

If council adopts the staff recommendations, it will mark consecutive annual rate increases for customers. Rate increases applied this year were approved during budget discussions in 2022.

National News: NAR Advocacy Update – August 2023

August is traditionally a quiet month in Washington, D.C. Congress is out of session while staring down a potentially chaotic autumn, with government funding and other deadlines looming.

While Senators and Representatives are back in their states and districts, REALTORS® are taking advantage of this opportunity to meet with their elected officials at home to share what we’ve accomplished and what needs to be done to strengthen residential and commercial real estate.

Making the dream of homeownership more affordable and accessible remains a top priority. Following robust advocacy by NAR to help qualified homebuyers navigate this challenging market, REALTORS® have achieved many important wins in the first half of this year:

• Vice President Kamala Harris and Department of Housing and Urban Development (HUD) Secretary Marcia Fudge announced a reduction in mortgage insurance premiums (MIPs) by 30 basis points following robust advocacy by NAR.
• The Federal Housing Finance Agency (FHFA) rescinded its proposed loan level pricing adjustment (LLPA) upfront fee on borrowers with debt-to-income ratios greater than 40 percent that was slated to go into effect August 1. NAR advocated for this fee reduction when President Kenny Parcell testified before a U.S. House panel in May about these unnecessary and confusing fee increases.
• The Federal Housing Administration increased the threshold dollar amount for Large Multifamily Loans from $75 million to $120 million, which NAR supported. The new policy also included the possibility of future annual increases of $5 million.
• NAR partnered with the Institute of Real Estate Management (IREM) on a targeted Call For Action asking commercial members and IREM members to share with the FHFA why proposed tenant protections for multifamily properties backed by the federal government would hurt both renters and housing providers. Of the more than 3,000 comments submitted, REALTOR® responses tallied nearly 40 percent. NAR also submitted a response letter.

Other wins have focused on advancing the real estate profession:

• The House passed the SECURE Notarization Act to allow immediate, nationwide use of remote online notarization (RON) technology.
• The House passed the CHOICE Arrangement Act, which includes the NAR-supported Association Health Plans Act, to expand access to association health plans to more Americans, including the self-employed workers of the real estate industry.

NAR continues to advocate for both bills to be considered in the Senate.

It may be quiet in the nation’s capital this month, but REALTORS® aren’t slowing down. Our Federal Political Coordinators and friends are taking the following priorities directly to members of Congress in their states and districts:

• Cosponsor the bipartisan More Homes on the Market Act (H.R. 1321), which incentivizes more owners to sell their homes by increasing the maximum amount of capital gains a homeowner can exclude on the sale of a principal residence and annually adjusting it for inflation.
• Cosponsor the bipartisan Neighborhood Homes Investment Act (S. 657/H.R. 3940), which attracts private investment for building and rehabilitating owner-occupied homes by offering tax credits that create a pathway to neighborhood stability through sustainable homeownership.
• Cosponsor the bipartisan Choice in Affordable Housing Act (S. 32/H.R. 4606), which creates incentives for housing provider participation in the Department of Housing and Urban Development’s (HUD) Housing Choice Voucher (HCV) program.
• Cosponsor the bipartisan SAFE Banking Act (S. 1323/H.R. 2891), which permits financial institutions to offer services to cannabis businesses in states where it is legal.
• Cosponsor the bipartisan Credit Access and Inclusion Act (S. 1654/H.R. 3418), which expands credit reporting for Americans with limited credit histories by encouraging the inclusion common bills like rent or utility payments.
• Incentivize the conversion of unused commercial buildings to residential and mixed-use properties.
• Prioritize housing production to increase inventory and help property owners and renters burdened by rising rent payments.
• Cosponsor the bipartisan Fair and Equal Housing Act (H.R. 4439), which would add sexual orientation and gender identity as protected classes under the Fair Housing Act.
• Reauthorize and increase funding for HUD fair housing enforcement.