Archive for Wednesday, December 6, 2000

Electric rates to increase

December 6, 2000

Residents and businesses will notice a hike in their electric bill beginning in January. The Baldwin City Council on Monday night approved an increase to electric rates and to the monthly service fee.

City Administrator Larry Paine said the city hasn't changed its rates in more than 10 years. The increase will fund a 2001 $2.3 million electric budget, which includes the city's cost of producing and delivering electricity to its customers.

"The cost of power has gone up," Paine said. "In addition, we have debt service for improvements we have been making to the electric system."

The monthly service fee on a residential bill will increase from $5 to $8, and the cost per kilowatt hour will increase from 7.6 to 8.9. Paine provided the example of a $51.02 electric bill, showing that it would increase to about $60.

A business's monthly service fee will increase from $10 to $17, and the cost per kilowatt hour will increase from 7.9 to 8.9. An example given by Paine showed a $91.02 bill increasing to $107.

Baker University is charged differently, and its base rate will increase from 3.93 to 4.7. Baker's demand charge will raise from $8.90 to $9.60.

"Depending on how much power you use, it could be as much as 20 percent," Paine said of the increase.

Paine said the residential rate increase should generate about $265,000; the business rate should generate $718,000 and the Baker rate would generate $357,000.

At the Dec. 18 meeting, the council will consider giving the school district a 5 percent discount on its electric rate. The district had requested to have a rate schedule similar to Baker University, or another schedule that would result in a lower bill. Council members requested numbers from Paine showing that the city would at least break even after the school district's discount.

One citizen said the rate increase isn't necessary. Michael C. Green called the rate hike a form of a property tax increase.

"A rate increase is just one solution to the problem," Green said.

Green considered the rate increase to be caused by the cost of purchasing and maintaining generating equipment at the power plant. He offered his solution: "get out of the generation business."

The council disagreed that operating the power plant is more costly than buying all of its power from an outside source. However, Terry McKinney, city utility director, said he will be conducting a study in the spring of the city's electric utility costs with and without a power plant.

Green also pointed out that KPL and KCPL rates are lower than Baldwin's. Council member Gene Nelson said he, as a citizen, would much rather pay Baldwin's rate increase, because it will help improve the local system. McKinney said KPL and KCPL are both facing rate increases.

"You go to KCPL and KPL and they have regular rate increases," McKinney said. "And we haven't had one in a long time."

Green and Mayor Stan Krysztof squared off in a heated debate on the topic with neither giving up ground. Eventually, the mayor put an end to the topic.

"You're through," Krysztof told Green.

Commenting has been disabled for this item.