The average Niles utilities customer will see an increase of just a few dollars a month after the Niles City Council approved a 5.9 percent electric rate increase Monday.
But at least one city council member is worried about the effect such an increase will have on local businesses and the potential of drawing more companies to the area.
“My first thought is on the industrial side,” said council member Bruce Williams. “We’re doing everything we can to get businesses here. How is this helping businesses want to come here?”
Williams, the owner of Williams Do It Best Lumber and Hardware in Niles, said the 5.9 percent increase will be “a huge increase” for his business.
City Administrator Terry Eull said Niles still has “some of the lowest rates in the country” and that rates are increasing everywhere. He also added the first plan was to increase the rate by 6.9 percent but some changes to capital improvements allowed the city to reduce it.
Niles Utilities Department manager J.W. Rossow said the increase is a result of an increase in power supply cost handed down by Indiana Michigan Power. The cost to implement the state-mandated Energy Optimization Act also increased about $100,000 this year.
The rate increase will tack an additional $3.87 a month on the bill of an average residential customer using 600 kilowatt-hours of electricity.
Council member Tim Skalla said the city needs to do a better job “publicizing” its rates in comparison to other municipalities.
“It would make it more palatable,” Skalla said.
The resolution to increase the electric rate passed by a 6-1 vote with Pat Gallagher voting no and Bob Durm absent.
Council member Dan VandenHeede brought up the possibility of restoring the Pucker Street dam as a possible way of reducing electric costs.
“It’s worth pursuing it,” he said. “Suddenly this kind of energy is becoming more competitive.”
The city is currently drafting request for proposals (RFPs) for a possible dam restoration project.

Council passes budget
The city council also unanimously passed the 2011-2012 fiscal year budget Monday.
Eull had to make $450,000 in budget reductions, most of which came by loss of employees by attrition. Eliminating all major road repairs in the city cut another $100,000
The budget projects $6.58 million in revenue and $6.584 million in expenditures.