SEGUIN ¡ª The city¡¯s electricity customers could soon see the high cost of producing electricity affecting their pocketbooks.

Seguin City Council, with little debate after an executive session Tuesday, voted 7-1 to increase residential electricity rates by 11.8 percent.

The increase was attributed to a 15-percent rise in wholesale electricity rates charged to the city by the Lower Colorado River Authority.

Mayor Betty Ann Matthies said the average monthly electric bill in Seguin will be increasing by about $11.27 per month.

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We must pass that cost on to the customer,¡± Matthies said after the vote to adopt the new rate upon first reading of the ordinance. The second reading is scheduled for the City Council¡¯s meeting on Tuesday, June 3.

¡°It¡¯s unfortunate that we have to do this, but we can¡¯t sell something for less than what it¡¯s costing us. In today¡¯s economy things have gone up and LCRA has increased our cost,¡± Matthies said. ¡°We¡¯re not making a big profit off of selling electricity. The only way to continue to survive is to pass that increase on.¡±

It¡¯s not just the residential rates that will be increasing in Seguin.

The electric rate for small commercial customers will increase by 6.19 percent. Medium commercial and industrial secondary customers will see more than a 15-percent increase; medium commercial and industrial primary customers will see a 14.84 average percent increase and industrial customers will have a 6.43 percent increase in the electricity bill.

Assistant City Manager Rick Cortes said LCRA¡¯s wholesale electric rate went up in January, and the city decided to absorb the hit for awhile.

¡°Be cognizant that as natural gas prices go up we will see additional increases coming down the pike, and the majority of the revenue goes to LCRA,¡± Cortes said.

Cortes said that the city has subsidized the city¡¯s water supply through electric company revenues, but that practice will come to an end as the city is attempting to make all departments self-reliant.

¡°We need to get to where our utilities are paying for themselves,¡± Cortes said.

He also added that the city¡¯s utility rates are competitive and will remain competitive compared to other utility companies.

The average electricity bill for Seguin residents will increase to about $106.77 per month.

Seguin is not alone in passing along wholesale electricity costs from LCRA.

New Braunfels Utilities recently announced that its local electric rates will increase in June, and the reason also is the increased cost of natural gas that LCRA pays to produce electricity.

¡°LCRA has huge costs for coal delivery, but the NBU hike is a direct result of natural gas prices, and they are passing the cost to their wholesale customers,¡± Gretchen Reuwer, NBU communications manager, said.

¡°If we had not increased our rates, we would be looking at $2 million a month in losses and we can¡¯t absorb that without jeopardizing the financial viability of the utility,¡± Reuwer said.

The NBU increase to residents and commercial customers in New Braunfels will average about $13 per month. The average customer uses about 1,300 kilowatt hours per month.

Customers who live in Guadalupe County and within the New Braunfels city limits that is included in Guadalupe County obtain their electricity from Guadalupe Valley Electric Cooperative, which also serves part of Seguin.

GVEC Corporate Services Division Manager Lindsey Durrett said GVEC has also been impacted by LCRA¡¯s increase in wholesale rates, but it has yet to be passed on to customers.

The average GVEC-served residence consumes about 1,500 kw/h. Based on 1,000 kw/h, the average residential bill is $101.53.

¡°Our board of directors haven¡¯t taken action to pass on the cost. Before the end of the year we will have to increase the rate, but the amount hasn¡¯t been determined yet,¡± Durrett said.

GVEC serves customers in 13 Texas counties.

Seguin City Council considered imposing a sales tax on residential gas and electrical utilities last summer.

After initially voting to establish a 1-1/2 cent sales tax, the City Council voted it down with a 4-3 vote.