WATERTOWN, S.D.(KXLG)- During a special budget meeting early Wednesday morning, the Municipal Utilities Board was told WMU recommends a 1 percent increase in electric rates, a 3 percent increase in water rates, and no increase in natural gas rates.

For the average residential customer in Watertown, that would be an 80-cent per month hike in electricity and an 84-cent per month increase in natural gas, meaning the average monthly utility bill will go up by $1.64.

The Utilities Board will meet Monday at noon to consider the increases for next year.

Even with the increases, Watertown customers will still be paying the lowest utility rates in the state, something Municipal Utilities General Manager Steve Lehner, who also sits on the Watertown Development Company board, said is good for individuals and the community.

The main driver behind the electric rate increase is the higher prices WMU has to pay to purchase power from Southwest Power Pool, Missouri River Energy Services, and Western Area Power Administration or WAPA.

The water rate increase comes after a rate study by Trilogy Consulting suggested annual 3 percent increases to fund water reserves adequately.