Two weeks after placing the motion on the table, members of the Dowagiac City Council approved a proposal rate hike to the city’s electrical service during its meeting Monday at city hall.

The council approved an amendment to raise the city’s commodity charge for electrical service by 2.5 percent, an increase that will take effect beginning in October. The decision was made by a 4-0 roll call vote; council members Lori Hunt and Danielle Lucas were absent from Monday’s meeting.

The rate increase is only added to the current commodity charge, as the city’s ready-to-serve charge will remain the same. A house that uses 1,000 kWh of power per month should expect to pay $121.92 for service, compared to the $119.16 it would pay under previous rates.

According to city leaders, the increase is due in large part to the rising cost of electricity, a trend that utility providers are seeing across the U.S. The higher rate will also help the city maintain and improved in its electrical systems, as well as cover the costs of participating in the state’s energy optimization program.

The increase is the second rate hike to the city’s electrical service in as many years. In April 2016, the council voted to raise the city’s ready-to-serve charge by 8 percent and the commodity charge by 10 percent.

The council also voted last month to raise the rates for water and sewage utilities, which will take effect Sept. 10.

Prior to Monday’s vote, David Fair, owner of downtown’s Ham-sters/Somewhere in Time, voiced his concerns about the impact that raising the electric rate would have on his and other businesses in the city, as they are charged a higher rate for service compared to residential users.

“I do not want to see Dowagiac become a place where you have a lot of really nice buildings downtown and few businesses,” Fair said.

“I share your concern,” responded Mayor Don Lyons. “I don’t like to see it [the increase] either, but prices are going up. You do what you have to do to stay solvent.”

Lyons also pointed out that, of the $804,000 worth of bills the council approved payment of Monday, more than half was devoted to paying American Electric Power for power in July, in the amount of $445,000.

The council also voted Monday to transfer the city’s banking services to the Dowagiac Chemical Bank branch office, located on Commercial Street. The bank was one of two financial institutions to bid on the contract, along with Fifth Third Bank.

The transfer was necessitated by the upcoming closure of the Dowagiac Huntington Bank branch office, which is set to close its doors at the end of September. The city previously had a contract with the bank for service.