An Independence council member's attempt to “get the ball rolling” on electric rate reductions received a generally hearty approval from the Public Utilities Advisory Board.
Mike Huff is proposing a resolution that would direct the city manager to implement various recommendations from the 2015 cost of service and rate study done by Sawvel and Associates, which the council tabled that year and never took further action.
Specifically, Huff wants to have rate structures simplified, resulting in about a 2 percent decrease for industrial and commercial customers. Before long, he would like to see a more drastic cut across the board, but right now this would have the largest impact. Part of the resolution directs the city manager to “take all steps necessary to present additional rate reductions.”
Such cuts would lower Independence Power & Light revenues by about $3 million per year, but Huff and Assistant City Manager Mark Randall said that would be offset by eliminating about 30 vacant positions over the next two years.
During Thursday's meeting, the board unanimously recommended that Huff's proposal move forward for council consideration. The resolution should be on Monday's council agenda. Most board members endorsed the proposed resolution, though Garland Land had some reservations because of the timing – another cost of service and rate study by Burns & McDonnell is due by the end of the year – and the proposed fixed customer service charge in 2015 caused great consternation from some citizens who potentially faced higher rates.
Huff said the fixed cost of service charge can be mitigated by eliminating the fuel-cost adjustment, and he believes the Burns & McDonnell study will mirror the Sawvel study in many ways.
“We've done studies and studies and had meetings and meetings; nothing gets done,” said Huff, a retired IPL transmission director who was elected to the council earlier this year. “I came up with a number that everyone can live with.
“We all know we have to get these rates down,” he said, adding that IPL's relatively high rates is adverse to attracting and retaining larger industrial and commercial customers, which tend to help stabilize all rates.
Randall said the city is looking to “dust off the Sawvel report,” tweak it and implement parts of it.
“We have some savings where we could start some rate reductions,” he said. “We all know our rate structure is bad and needs to be updated.
“We're trying to get started with what can we do now. This gives the intention of restructuring the rates.”
Land wondered if Huff's proposal couldn't just wait a few more weeks.
“I don't know why we go back to the old study when we have a new study? We could have a more current understanding of the financial situation.
“I'm just trying to understand the timing of this,” he said, adding that it's important to have public hearings given the chance of some residential bills going up. “I just want to have an orderly discussion.”
Board Member Larry Porter noted that the resolution calls for “various recommendations” to be implemented – not all of them.
“I trust the staff on taking the best recommendations,” he said.