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Independence Cutting Electric Rates 2%

Tuesday, November 20, 2018 9:37 AM | Anonymous

From the Examiner by Mike Genet 

Independence Power & Light ratepayers – all of them – will get a small rate reduction within a couple months.

The City Council unanimously approved a resolution Monday directing the city manager to implement a 2 percent decrease for all utility classes. Officials anticipate the cuts should go into effect within 60 days, and City Manager Zach Walker said he hopes they can do by the end of the year.

The rate cuts will lead to about $2.7 million less annual revenue for IPL, offset by eliminating 30 vacant positions over the past two years. Also, the general fund would receive $272,000 less annually in PILOTS (payments in lieu of taxes) that come from 9 percent of each utility bill. With the current budget year about half complete, that would amount $136,000 for the remainder of the 2018-19 fiscal year.

“We know based on what we’ve done the last couple years, we have the ability to do this 2 percent reduction today,” Walker said, adding that last fiscal year city staff maneuvered around an unexpected $300,000 expense from a municipal court software malfunction.

“There’s a number of budgetary management things we can do,” Walker said. “It is a number I feel confident my staff and I can work around.”

The unanimous vote received some raucous applause from much of the crowd that filled council chambers Monday until after that vote.

Council Member Mike Huff originally had planned for a resolution to implement recommendations from a 2015 cost-of-service study, including a 2 percent reduction for industrial and commercial customers achieved through a simplified rate structure, along with a fixed cost of service that would be part of each electric bill, replacing a lower minimum charge. He revised his resolution after last week’s Public Utilities Advisory Board meeting.

The fixed cost was not part of Monday’s resolution. City staff said they anticipate working on a simplified rate structure based on a recommendations from Burns & McDonnell’s upcoming coming cost of service rate study. Part of Monday’s resolution calls for Walker to present preliminary findings from that study on Dec. 10.

Huff has said he ultimately would hope to get a 10 to 12 percent cut across the board. He credited Walker and Mark Randall, assistant city manager and utilities director, with making the rate-cut deal possible.

“They worked their tails off on this,” Huff said. “I asked for the moon on this and didn’t quite get it.”

“Tonight was a big night, and we all know there’s big decisions ahead,” Mayor Eileen Weir said, referring to digital smart meters for city utilities that is back for consideration and possibly closing the Blue Valley Power Plant soon.

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