For years our residential electric rates in Independence have been the lowest in the region – a direct benefit to the citizens of Independence for owning our power company instead of it being a “for profit” company owned by stockholders.
While the stockholders of a privately held power company will expect to earn a profit from their investment (around 10 percent a year), we, the citizens of Independence expect low rates, good service and a focus on the community from Independence Power and Light.
IPL, our city-owned-and-operated power company, is well managed and well served by a good workforce. But our residential electric rate is now the highest in the region based on the city's own comparisons with KCP&L and BPU while our commercial electric rates have been higher than KCP&L for several years.
Looking at city budget documents, which provide the comparison among IPL, KCPL and BPU, indicates that some commercial rates have been higher for many years (might help explain why other areas of the region have seen increasing commercial growth while Independence still has a large number vacant storefronts), yet the residential rates hit the top in just the last two to three years.
Recently, I have been engaged with a few other residents in looking at energy issues in Independence through a small group we have chosen to call IndyEnergy. Our website (www.indyenergy.org ) has the city budget documents for anyone to view.
IPL reports that after the four years (2009 to 2012) of electric rate increases of 9 percent, 5 percent, 5 percent, 5 percent and 5 percent (that is a 29 percent increase without compounding), they do not expect to request a rate increase in the next few years but they have solid reasons to argue that both KCPL and BPU will seek rate increases. A recent Kansas City Star article quoted KCP&L leadership as reporting they would not seek another rate increase for the next two years.
What happens at BPU and KCPL in the next few years is outside of our control, but evaluating why our rates have climbed and how to return them to the levels that are proper for our residents and business is within our power as “owners.”
Higher residential electric rates impact the quality of life of the many seniors in Independence as well as those on fixed or challenged incomes. Higher commercial rates seriously hinder our ability to attract and retain businesses. Higher rates also are impacting our non-profit world of schools and churches, which are reporting that they pay substantially higher rates than if they were served by KCP&L. (It’s difficult to tease that issue out of the city budget documents.)
While the theory is that a municipally owned power company should offer lower rates proportional to the profit margin of a private company and provide better service for the benefit of the citizens (a benefit of being the owner), our status of having the highest residential and commercial rates in the region indicates a break between theory and practice.
Jason White is a former Independence City Council member. He is involved with the local group Indy Energy.