Groton ― The City Council on Monday took an initial vote to approve electric rate increases for Groton Utilities ratepayers.

Under the three-year proposal, residential customers would see about a 1.3% increase each year for the next three years.

Small commercial customers would see a projected 2.1% increase the first year, followed by a 1.9% increase the second year and a 1.8% increase the third year. Medium commercial customers would see a 2.2% increase each year over the next three years, and large commercial customers would see a 0.8% increase each year over the next three years.

Rates for street lights would rise 2.1% each year.

The council is scheduled to take a final vote on the electric rate ordinance next month. If approved, the new rates will go into effect in May.

City of Groton Mayor Keith Hedrick said by phone that a cost-of-service study was done to determine the cost of maintaining the utility and providing power. He said the increases are due to the increased cost of operating the utility, though he pointed out that the public utility’s rates are still 15% to 20% lower than what other utilities charge.

“I recognize that every rate increase is a potential burden on the ratepayer, but we’re trying to minimize the cost of increases and still maintain the equipment of the utility so that we don’t have power outages,” Hedrick said.

Groton Utilities is owned and operated by the city. The utility’s electric division serves customers in the city and part of the town.

Utility Financial Solutions President Mark Beauchamp, a consultant, outlined the proposed rates during presentations last month to the City Council and at a public hearing. He said the strategy has been to implement small periodic rate adjustments to keep the utility financially stable and to minimize as much as possible the impact of rate increases on customers.

Beauchamp said an average customer who uses about 700 kilowatt hours of electricity a month will see about a $1.70 increase. But he said the market cost of power is expected to be reduced in July, which will offset much of the increase.

Hedrick explained that the cost of purchasing power ― reviewed every six months ― is anticipated to decrease in July due to lower energy costs. That may mean customers see lower bills then, but it depends on energy consumption as people often consume more energy in the summer to run air conditioning.

At Monday’s Mayor and Council meeting, Councilors Gwen Depot, Erin Artale, Stephen Sheffield and Paul Norris voted in favor of the new rate structure, while Councilor Christine Piazza, who cited concerns about the impact on residents working minimum wage or up to $20 an hour, voted against it.

Hedrick said programs are available to help people in need.

k.drelich@theday.com