Don’t be lulled by low power prices

Don't be lulled by low power prices by David Lias The price of a kid's happy meal at McDonald�s.

That's what an average user of electricity in Vermillion will soon have to shell out each month to cover an upcoming increase in power rates.

Stop and think about the volatile nature of energy prices for the past three decades.

Couple that thought with this fact: the city of Vermillion's municipally-owned electric utility hasn�t raised the price of power for the last 10 years.

The 2004 residential rate increase for an average customer will be 4.8 percent, or $2.16 per month.

The fact that we're being asked to pay such a little bit more each month is really quite remarkable.

The Vermillion City Council decided Monday to approve the rate increase. It�s reached a point where it has no choice.

This year, the Western Area Power Administration (WAPA) will be increasing its rates by 17.6 percent in a two-step process.

Vermillion annually receives a fixed allocation from WAPA that covers about 72 percent of the city�s power requirements. The rest of the city�s electricity comes from Missouri River Energy Services.

Part of the reason rates are going up is the dry weather experienced in the Midwest the past couple years.

Missouri River reservoirs are at record low levels. When river flows are down, so is the amount of electricity that�s generated at the dams from Fort Peck all the way down to Gavins Point.

Vermillion and other communities will continue to experience small WAPA rate increases throughout much of this decade.

Blame it on supply and demand. There�s just so much juice that our mainstem dams can produce, especially during dry years. And, as Alderman Gary Wright succinctly said Monday, "When people turn the switch, they want the light to go on."

The city's wholesale billing demand and energy has increased by an average of approximately 3.4 percent per year.

WAPA rates likely will increase about 3 percent from 2006 through 2008. And purchased power expenses will increase by an average of 7.2 percent each year due to load growth and WAPA increases.

It�s important that we don�t simply take our electricity supply, and its competitive price, for granted.

Thanks to excellent city management, Vermillion has been able to improve its electrical infrastructure the past 10 years without passing along the costs to consumers.

We�re surprised Vermillion was able to hold off for so long. Let�s face it – we�re a society that�s hooked on energy of all kinds, from fossil fuels to the kilowatts that continuously surge into our homes and businesses.

A solution to the problem may be the construction of new coal-fired power plants and "wind farms" – small acreages literally covered with rows of windmills.

Technology has made great strides – in 1980, it cost 40 cents to produce one kilowatt of power with one of those large windmills, according to Minnesota Public Radio. Now that cost is less than a nickel.

These ideas are hardly a quick fix to what may be an increasingly vexing problem in future years, however.

You can't simply load electricity in a truck and ship it to where it�s needed. It, naturally, needs to be transmitted through power lines. Back in 2001, Ed Weber, manager of transmission planning for WAPA, told Minnesota Public Radio that he doesn�t see that problem being addressed.

"It is unlikely the power transmission grid will be changed to expand capacity. Transmission is very expensive, and it becomes cost prohibitive,� he said.

Today, we can take comfort in knowing that we can flip a switch and our energy needs will be met. It�s clear, however, that challenges lie ahead.

There�s no time like to present to begin addressing them. The Vermillion Plain Talk editorials reflect the opinion of Plain Talk editor David Lias. You may contact him at

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