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  • Last modified 210 days ago (March 25, 2021)

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Buffeted by
government and power

Are Hillsboro and Marion residents taking a bath because the towns belong to Kansas Power Pool?

Even before the power pool’s ongoing attempt to impose a massive rate increase because of a cold snap last month, electricity rates charged in towns belonging to the power pool statewide have been considerably above rates charged in towns served by private utilities.

According to U.S. Department of Energy data, Kansas towns enrolled in the power pool charged 27.8% more for commercial customers, 30.5% more for industrial customers, and 3.7% more for residential customers than did private utilities like Evergy.

In Marion County towns other than Hillsboro and Marion, the average residential customer pays Evergy as much as 7.9% less, while the average commercial customer pays as much as 26.9% less and the average industrial customer pays as much as 53.2% less, according to federal data.

Actual numbers may vary somewhat, depending on how those spinning them count extra charges like base rates, facilities fees, and surcharges. Federal numbers presumably do this the same way in all cases. But even if not, it’s clear customers aren’t benefiting. The question is, are the towns?

The argument long has been that towns use electric utilities as profit-making businesses, generating income that helps reduce property taxes. No one likes property taxes, of course, but is the trade-off fair?

If power pool towns are reselling electricity purchased at the same rate that average customers pay in other towns, the average customer in Hillsboro is paying $161.17 a year in extra electric costs on top of $471.89 a year in city property taxes. And that’s before the additional $183.95 the power pool wants its member towns to charge annually because of the cold snap.

While it’s nice to reduce the burden on property taxpayers, transferring that burden to consumers through inflated utility bills is unfair to those least able to pay — people with older, cheaper, less insulated houses; less efficient appliances; and more kids to bathe and do laundry for.

Marion’s utility rates are even more short-sighted. According to federal data that businesses looking to relocate are sure to consult, Marion charges commercial customers 16.8% more than the state average and industrial customers a whopping 54.3% more than the state average.

Is it any wonder Marion has trouble attracting businesses, particularly when Hillsboro has carefully set its rates so that, on the federal list, commercial and industrial rates come in exactly at the state average?

That adjustment, by the way, appears to be borne on the backs of average Hillsboro residents, who pay what federal data list as the highest electric rates in the county, even before the power pool surcharge is added.

All this is complicated, of course, making it easy to be minimized and spun in whatever direction bureaucrats might want. Their goal appears to be to keep all of us thinking only in terms of mill levies when it comes to assessing the cost of their doing business on our behalf.

Many people accept as an axiom that private enterprise tends to be more efficient than government. Kansas Power Pool isn’t private. It’s actually a collection of governments, each of them individually and collectively imposing whatever inefficiencies are endemic to government operations.

Perhaps it’s time to consider pulling the plug.

— ERIC MEYER

Last modified March 25, 2021

 

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