Archive for Wednesday, December 27, 2000

School district, city facing higher rates for utilities

December 27, 2000

The Baldwin school district is lowering its thermostats, because of the high costs of natural gas.

Supt. James White said the district could pay $80,000 or more for natural gas this year, compared to $40,000 last year.

Students are out of school until Jan. 8, but when they return White said the thermostats will be set at 68 degrees, instead of 72.

"In the next district news letter, we've asked the parents to dress the children warmly," White said. "We will be setting the thermostat at 68 degrees. It has been set at 72 degrees."

The lower temperature shouldn't make students or faculty uncomfortable, and White wishes the district could feel more comfortable about natural gas prices.

"We are paying three times what we paid last year," he said.

Last year, the district paid $40,000 for natural gas from Mountain Energy Corp. The district's "locked" rate was about $2.45 per thousand cubic feet (mcf).

Mountain Energy filed for bankruptcy in October, and the school district is currently paying nearly $8 per mcf. Although the district anticipated higher gas prices and budgeted $80,000 for the year, White said that may not be enough.

"It has taken a steady upward trend since that time," he said.

The district locks in a monthly rate with Seminole Energy, out of Oklahoma. White said the district considered joining other school districts to purchase natural gas through the Kansas School Board Association or Greenbush, another educational organization, but Seminole offered a better rate.

"Right now the rates are variable and we don't have anything locked in," he said.

White said the board also discussed locking in a rate with Mountain Energy over the summer, but decided to wait for natural gas prices to go down. They didn't.

"We hoped to get the gas back in the range of $2 or $3, but it continued to climb," White said. "We hope the price of gas comes down some, so we can lock in a rate for the rest of the heating season."

White said the district may exceed its $80,000 budget for natural gas. However, a recommendation during the budget process to double last year's budget was good advice, he said.

"We went ahead and doubled the amount we paid a year ago. And we're glad we did," he said. "It still might not be enough."

And as if the natural gas bill wasn't enough, the district is also facing a higher electric bill at the first of the year. The city is raising its electric rate, and an average customer will be paying 12 percent more starting with the January bill. The city is considering giving the school district a 5 percent discount. However, the discount would still reflect an increase.

"When you increase over 12 percent and a discount of 5 percent, it's still an increase," White said.

Baldwin High School creates the largest electric bill for the district, and White said a consulting engineering firm is determining how the school can be more energy efficient. White said some of the problem may be the school's heating and cooling system, which sometimes have to work at the same time to maintain the temperature in the building.

"It just can't be cost effective to operate that way," White said. "If it is, it will surprise me."

Weather strikes city, as well

A low and partially frozen Missouri River caused the city to purchase power from another source last week. The city found itself paying higher prices for the electricity it supplies to its customers, because one of the city's electricity providers shut down.

The Kansas City, Kan., Board of Public Utilities closed the Nearman power plant after the Missouri River fell below the facility's intake level.

Because of the outage, the city is buying power from Western Resources for about twice the BPU rate, said city utility director Terry McKinney.

"Since we lost BPU, we needed more power so we had to go out on the open market," McKinney said.

McKinney said the city uses 2 megawatts of power from the Grand River Dam Authority, and can buy up to 2 1/2 megawatts from BPU.

The city also has the ability to generate the power. However, because the cost of diesel fuel has doubled and because of maintenance costs caused by the cold weather, it was just as cost effective to go with Western Resources.

"There is not a whole lot of difference between us generating and buying it," he said.

McKinney said Baldwin went together with Osawatomie and Ottawa, which also depend power from the Nearman plant, to buy Western Resources power.

"It's nothing like in the summer when it is so expensive," McKinney said of the open market. "It's maybe twice as expensive. We are talking way under $100 a megawatt. And it will not affect rate payers."

The Nearman plant was expected to be back online this weekend.

"It's not a big issue," McKinney said. "We have enough resources to get power in."

McKinney said the city's load for electricity is running from 3.6 to 3.8 megawatts.

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