Rochester, MN  (KROC AM News) - Rochester Public Utilities customers could see a larger than anticipated increase in electric rates next year.

The RPU Board meets Tuesday and is expected to act on preliminary electric and water budgets for 2017. The municipal utility previously okayed a schedule of electric and water rate increases that include an electric rate hike of 1.7-percent next year.

RPU staff is now recommending that increase be raised to 3.7-percent to help cover higher debt service payments for a new natural gas fueled West Side Energy Station, a potential expansion of the RPU Service and costs associated with the completion of the CapX2020 project. The staff recommendation also calls for electric rates to rise 3.5-percent in 2018 and 1.5-percent in 2019.

The preliminary budget also includes a 6-percent increase in water rates next year. That increase matches the planned hike in a three-year rate plan that was adopted by the RPU board in 2015.

If the board approves, RPU will give official notice of the proposed rate increases, which will come up for a final vote by the RPU board in November, followed by final approval by the Rochester City Council.

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