Norwich ― Customers of Norwich Public Utilities will see their rates rise for electricity, natural gas, water and sewer services in November, but in most cases their monthly bills will drop substantially due to sharp drops in the cost to purchase wholesale gas and electricity, NPU officials said Tuesday.

NPU administrators presented a proposed rate schedule to the Board of Public Utilities Commissioners on Tuesday. The rate increases would be 4.5% per year for the next three years for natural gas; 4.75% for electricity in each of the next three years and 8.32% in each of the next three years for water service.

“However, when combined with the significantly reduced cost of natural gas and electricity, the overall impact on customers will result in lower bills for nearly every NPU customer,” NPU officials wrote in a summary of the proposed rates.

If approved by the utility board in September, NPU estimated residential customers who have all four services would see savings of 12.7%, about $51 per month. Customers with electricity, water and natural gas services should see savings of $63 per month, 22.14%, and those with just electricity and water service should see savings of $11 per month, 5.7%, NPU officials said.

No one spoke during a public hearing on the proposed rate increases Tuesday. Public comment will be taken at the 6 p.m. Sept. 26 meeting prior to the board’s vote on the proposed rates. The meeting will be held at NPU headquarters, 16 S. Golden St. in Greeneville.

NPU officials said the new proposed electricity and gas rates are based on inflation. City water rates have not risen since 2018, while NPU has undertaken $20 million in water system upgrades in the past five years.

NPU electricity and natural gas bills have a separate line item for purchased power adjustment and purchased gas adjustment based on market conditions. Prices are volatile throughout the year, NPU General Manager Chris LaRose said Tuesday. In winter months, when costs rise, NPU typically uses money held in its rate stabilization fund to offset the cost spikes.

The proposed 12.1% rate increase for sewer service would be good for only one year mostly to cover ratepayers’ portion of the $200 million new sewer plant, to begin soon. Currently, NPU has secured state and federal grants to cover 37%, about $74 million, of the cost, with the remainder to be paid for through low interest 2% state loan to be repaid by NPU customers over 20 years, NPU spokesman Chris Riley said.

Laura Huren, NPU financial planning manager, said the sewer rate is not so much an increase as a rate change connected with the $200 million project, the largest single capital project in NPU history. Sewer rates will be evaluated each year as the project progresses and undergoes alterations.

“The $200 million sewer treatment plant is driving all of this,” Huren said.

c.bessette@theday.com