Aldermen ponder small electric rate increase

By Travis Gulbrandson

travis.gulbrandson@plaintalk.net

The Vermillion City Council will consider a resolution to increase some of the city’s electric rates at its next meeting on Jan. 6, 2014.

The council will be voting on whether to increase the Missouri River Energy Services (MRES) rates by 2.2 percent or $0.002 per kilowatt hour.

City finance officer Mike Carlson said most households have an average of 1,000 kilowatts, which would be $2 per month.

This comes following a report from the city’s utility committee that was heard at the council’s Dec. 16 meeting.

City Manager John Prescott said that in late October the city received notice that MRES would be increasing its charges for supplemental power by 5.5 percent in 2014.

Vermillion is one of about 60 communities that uses MRES.

The Western Area Power Administration (WAPA), which provides 60 percent of the city’s power, is not projecting any rate changes for the year.

“When you blend the 5 percent rate increase and the other remaining 40 percent, we took a look at those numbers and tried to determine what we might need, I guess, to help balance the books and pay for the power that we are purchasing from these entities,” Prescott said.

City and MRES staff suggested the 2.2 percent rate increase to the utilities committee, Prescott said.

“It would not be necessary at this time to collect that all 12 months of the year, but if we pulled that off and do a rate increase the goes out on the bills that are mailed out in February that are due no later than March 10, 2014, that would help balance out what we need,” he said.

The last time the city saw an electric rate increase was July 2011, at which time an increase of slightly more than 2 percent was enacted.

Seasonal rates were implemented in 2012, which were “revenue neutral,” Prescott said.

“Going into 2012, we dropped the rate a little bit by nine months of the year, and increased it a little bit three months of the year, which reflects the power purchasing costs of Missouri River during those three months,” he said.

This is the first overall rate increase to be proposed since 2011.

Vermillion Mayor Jack Powell spoke in favor of the smaller increases.

“I think our community has attempted to have modest increases, rather than wait until it’s a 10 percent or 15 percent increase,” he said. “I think that’s better for our city to do it in incremental steps rather than in big steps.”

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