Is NTUA the only power company on the Navajo Nation?
NTUA is not the only electric utility company operating within the Navajo Nation. Arizona Public Service Company serves residents in the western portion of the reservation while Continental Divide Electric Cooperative and Jemez Mountain Electric Cooperative serve residents on the eastern portion. The City of Gallup provides electric service to some Navajo residents near Gallup, as does the City of Farmington in the Four Corners area. Rocky Mountain Electric also provides electric service to the reservation residents in southeastern Utah. Electric utility companies operate under service territories and do serve everyone within their service territory.How Does Community growth impact NTUA?
Since 1959, the electric customer base for NTUA has grown from 500 customers to nearly 39,000. NTUA is providing electric utility services to residents throughout the Navajo Nation. Families and communities are growing and the need for utility services continues to expand. For example, utility construction projects in remote areas require more equipment and employee travel time; therefore, increasing the costs of materials, supplies, and gasoline to provide these essential services.
In nearby cities, electric customers are more densely populated and are located in one central area. The challenge for NTUA is to provide service to customers who live miles and miles apart, over 25,000 square miles, forcing the cost of extending and maintaining utility lines to increase significantly.
Does NTUA receive its electricity free? If not, where does the power come from?
No. NTUA does not get electrical power free nor does NTUA participate in any electrical generation facilities near the Navajo Nation. Instead, NTUA buys electrical power from outside companies, such as, Tucson Electric Power, Arizona Public Service Company, Public Service Company of New Mexico, and the Western Area Power Administration.
This electrical power is purchased and then received at a delivery point, typically a large structured facility called a substation. From there the high voltage is downsized to useable voltage by a series of transformers and then transmitted across the Navajo Nation and distributed to Navajo homes and businesses through a vast network of distribution power lines operated and maintained by NTUA.
In similar fashion to the NTUA customers, NTUA also receives an electric bill every month from outside power companies for its purchases of electrical power. Approximately 50% of NTUA’s electric revenues go toward paying for the purchase of electric power to deliver to our customers. In 2005, NTUA paid $27 million for electrical power.What is the condition of NTUA’s Electrical Infrastructure?
NTUA has been in the utility business since 1959. Most of the power lines were built during the 1960s. NTUA must maintain, upgrade and, in some cases, replace these aging power lines. These lines are becoming heavily loaded, which limits the capacity to serve new customers. Even though we are repairing and maintaining these lines as best as we can, we will have to eventually replace them. When you have only so much money to work with, it makes required maintenance, repairs and upgrades more difficult.What type of funding does NTUA get from the Navajo Nation?
NTUA does not receive any funding or appropriations from the Navajo Nation for its operational needs. NTUA operates strictly on the revenues generated through its rates. The Nation and associated federal programs pay to build these electrical power lines, however, NTUA’s customers pay to keep them running and maintained.
Certain capital contributions for construction purposes are received via the Navajo Nation Community Development Block Grant and Capital Improvement Offices. The Navajo Nation CDBG Office submits a Grant Application annually, to the USDA Housing and Urban Development for infrastructure projects on behalf of Navajo Nation Chapters.
NTUA receives this funding via the Chapters to construct electric distribution systems to extend electric service to the Navajo people. Also through this grant, the Indian Health Service constructs water and wastewater systems for communities. These systems are then transferred to NTUA to operate and maintain. NTUA receives a portion of PL86-121 funding to extend services to individual Navajo homes under a program called Scattered Projects. NTUA performs the operation and maintenance and the customers also pay for those actions and activities.
NTUA does not receive any Navajo Nation funding for natural gas improvements.Why does NTUA increase utility rates?
First of all, we do not like having to increase the price of utilities. We understand that paying more is difficult for all of us; however, the revenue coming in today unfortunately is not enough to cover expenses for day-to-day operations, including purchasing materials and supplies in order to provide the necessary upkeep of the utility system.
We strive very hard to keep utility rates at the lowest cost possible. We considered adjusting the electric utility rates five years ago to cover the increased cost of doing business. Instead, NTUA began to look at all alternatives and seek more cost effective options to run its operations. Those actions proved to be effective over the past five years by holding off any electric rate increase.
Rising costs are everywhere and affect everyone. We see the higher prices at the grocery stores and certainly at the gas stations. Prices are continually rising, including the cost of utility supply.
We work hard to control internal expenses, yet the cost of maintaining our utility system is continually impacted by the increasing cost of fuel, materials and equipment. Regional utility companies are experiencing the same rising costs and have also taken steps to increase utility rates.
What Has NTUA Done to Reduce Costs?
NTUA has controlled costs internally by reducing travel, training, and much needed materials for maintenance. Staffing levels have remained the same for seven years even while our customer base has increased. Capital purchases and overtime have been reduced. Minimal meetings are conducted and confined to Navajo Nation boundaries. Major purchases are carefully reviewed and budgeted within reasonable years. We are doing everything reasonable to control expenses without jeopardizing the reliability of our service. However, the maintenance of our systems cannot be minimized much longer. Utility systems are aging and need renovation. Electrical power capacity has peaked in some areas and needs upgrading to meet the growth demands and sustain reliability.
When NTUA revenue surpasses expenses, will the rates decrease?
A moderate revenue margin must be maintained in order for NTUA to qualify for long-term financing with various funding agencies. Any revenues that are above the normal operational expenses are used for planned replacements, renovations, project upgrades, improved operations and maintenance, or to address unexpected emergencies.
Many of our customers have asked to pay their bill by credit/debit cards, and use of the Internet to manage their accounts. These types of improvements for customer service must be funded as well by revenues generated.
NTUA does not expect to decrease rates, however, will apply any excess revenues to improve the maintenance of the multi-utility system.
How will a rate increase affect the elderly and customers living on fixed incomes?
A rate increase will generally affect all classes of customers who have electric services. The effect would be dependent on the usage of the individual household. NTUA local offices can be contacted for information on the Senior Citizen Discount Program and/or tips on energy and water conservation. We will continue our educational efforts to encourage energy conservation.