An Independence City Council sub-committee will recommend to the full City Council that, effective July 1, 2020, all Independence Power & Light ratepayers receive the 6 percent rate cut the council has previously approved and not see a rate increase for at least five years.
The Council Utilities Rate Committee, which after Thursday has met nine times since December, consists of Mayor Eileen Weir and council members Mike Huff and Tom Van Camp. It will also recommend consolidating rates into five classes, having four adders or riders onto rates and maintain IPL's current license tax on gross receipts at 9.08 percent.
At the Public Utilities Advisory Board meeting later Thursday, Board Member Larry Porter said he would support the recommendation with the understanding that the final plan is still in the works and the PUAB would get to review that. With one member absent, the board unanimously supported the recommendation.
The council had already approved across-the-board rate cuts of 2 percent and then another 4 percent within the last 10 months, while Burns & McDonnell conducted a rate study that still isn't 100 percent complete. In an early revealing last month, the consultant company said it would consolidate IPL's current 22 rate classes to 12 and had built rates based on a 6 percent reduction in rate revenue. As such, some ratepayers might not realize a 6 percent cut.
“They had questions about, what did the council mean with the 6 percent,” Mayor Eileen Weir said of Burns and McDonnell. “This resolution is really more a clarification. It's not really contradicting the Burns and Mac study, but changing how it would be structured and presented.”
“They put in a 6 percent average, but then it's a question of if everybody would get about 6 percent or definitely get 6 percent. We needed to give that direction.”
The sub-committee's five recommended classes are residential, commercial and industrial, large general service, large power and lighting. The recommendation, pulled that directly from the cost of service and rate study by Sawvel in May 2015, would include 12 rate schedules among those five classes. Weir said it's similar to what Burns and McDonnell initially presented.
“We liked that structure with five broad categories with subcategories within that, depending on certain usage,” Weir said. We took it to staff and asked, 'Can you make this work?' and they said yes.
“It's similar (to Burns and McDonnell's study). It makes it a little bit simpler but achieves the same thing – getting are rates more competitive.”
The mayor said she hasn't been worried about the council making some decisions on rates while the rate study remained incomplete. Even if some IPL rates aren't the lowest compared to other power utilities in the region, the bills could be lower based on various usage factors.
“We want to make this utility the most reliable and most competitive,” Weir said. “We've got to make a series of smaller decisions and not wait until see every single contingency. We needed to respond to the needs of community.”
“At the end of the day, this is something we should be celebrating.”