Norwich — During its first virtual meeting Tuesday, the Board of Public Utilities Commissioners approved a 2020-21 overall $95.96 million budget that calls for no utility rate hikes for electric, water and natural gas customers, but a 6% increase in sewer rates starting Nov. 1.

NPU officials are scheduled to present the budget to the City Council on April 13.

The budget includes the largest ever revenue-sharing payment to the city, $9,169,722, up from the $8.86 million paid to the city last spring. The city charter requires NPU to pay 10% of electric, water and natural gas gross revenues to the city each year. The payment is based on the audited revenue totals in the 2018-19 budget.

NPU officials said the utility has turned over $82.6 million to the city over the past 10 years.

But the overall 2020-21 budget — written before the current COVID-19 virus public health emergency — shows an expected $4 million overall drop in revenue. Electric revenues are expected to drop by $1.1 million, including a drop of $552,813 in commercial revenues and $405,439 in industrial electric revenue.

Laura Huren, NPU financial planning manager, said part of the revenue drop can be attributed to ongoing energy efficiency projects at some of the city’s largest commercial businesses. She said there was no major loss of businesses or industries.

Part of the drop in natural gas revenues is good news for city customers, as well as NPU, as natural gas prices have dropped dramatically now that major gas pipeline expansions into New England are online, Huren said, and NPU expects sales volumes to increase by 2.2%.

NPU staffing is budgeted to remain stable next year at 148, where it has been for the past several years, NPU spokesman Chris Riley said.

The expense budget for the electric division, by far the utility’s largest, totals $56.8 million, up by $1.8 million from last year. NPU plans to use $848,000 in its share of revenues in the Connecticut Municipal Electric Energy Cooperative rate stabilization fund to help stabilize rates in the coming fiscal year.

The natural gas division budget is $19.6 million, down by $647,746, and the water division budget is $10.5 million, up by $480,256 from the 2019-20 total.

The sewer division, the utility’s smallest, has an operating budget of $8.8 million, up by $729,548. But this division is expected to be the focus of attention in the coming years, as the city gears up for a $167 million sewage treatment plant upgrade. The 6% rate hike would cover the very beginning stages of that work, Huren said.

NPU has been collecting an additional fee on sewer bills for the past several years to raise money for the much-needed, state-mandated major improvements to the archaic system. The fund now has about $5 million, Huren said, as some money has been drawn from the fund for ongoing work to separate stormwater runoff from the sewer system.

The 6% rate increase will take effect Nov. 1. Riley said the rate hike would result in about a $3 increase in the average residential customer’s monthly bill.

None of the utility division or management budgets presented Tuesday took into account possible dramatic shifts in utility usage and revenues caused by the coronavirus disruptions to the economy.

“This draft budget was developed prior to the coronavirus pandemic, which will have a significant impact on NPU revenues,” Riley wrote in a summary of the draft budget presentation. “While it is too soon to make any projections as to the extent of these changes, we are already making contingency plans to reduce expenses while not compromising the health and safety of our customers and employees.”

Revenue disruptions due to the coronavirus could include drops in revenue from businesses closed or downsized to try to prevent the spread of the virus, increases in revenues from residential customers forced to work or take part in distance learning at home. The state also has enacted a moratorium on utility shutoffs during the public health crisis. Riley said NPU fully supports the moratorium.

Riley said internal discussions have included delaying capital improvements and scheduled maintenance work. “Until we have a better handle on what the impact will be, we can’t decide,” he said of the utility’s response to the virus. “We’ve been tracking expenses with commercial customers and watching residential usage and the bill picture.”

c.bessette@theday.com