Council stalls on vote, rates would still be lower than Marion’s
Hillsboro electricity users can be certain of one thing: Their rates are going up.
Just what the increase will be and how to implement it are still in question, as city council members shot down a resolution that would have raised rates by 1.1 cents per kilowatt hour effective June 1.
City Administrator Larry Paine walked the council through detailed usage and price projections that formed the basis for the recommended action.
“Our Kansas Power Pool charges went up significantly,” Paine said. “That takes into account the fact that I stated in the staff report that the energy market has changed entirely in 2014, and it’s become much more expensive. I’m expecting to generate on behalf of our energy provider $2.1 million worth of payments we’ll have to make for the cost of energy.”
While the council had agreed in a recent meeting to start building reserve funds, Paine said the increase won’t be used to do that.
“In this proposal there is no change in the fund balance reserve, it’s just to cover the cost of the electricity we will buy and use from the power pool,” Paine said.
Paine also responded to a request from Council member Shelby Dirks to compare Hillsboro’s rates with Marion’s.
“Their electric rate for 2015 is much higher than the recommendation I’m making to you,” he said.
Dirks questioned whether Hillsboro is getting the best rate possible from KPP, or if Westar could provide cheaper service. When Paine cited KPP research that indicated they were cheaper, Dirks was skeptical.
“Well of course they’re going to tell you that it’s better,” he said.
Mayor Delores Dalke took the discussion in a different direction when she raised the option of demand meters, which would limit electricity delivery during peak usage periods.
“I’ve never been a fan of demand meters, but as these rates are continuing to go up, should we do anything to consider demand meters and if there’s any way to save money versus just a flat rate?” she asked. “We’re hitting our high rates about 6 or 7 in the evening.”
“That’s when families come home from work,” council member David Loewen said. “If they have a thermostat that’s set to cool the house down right before they come home, that’s going to increase demand at that time.”
Other options discussed including monthly bill adjustments and seasonal rate changes. As the discussion extended past 45 minutes, council member Byron McCarty appeared to have had enough.
“Do you want this done this evening?” he asked of Paine. “Does it need to be done this evening?”
“If you don’t adopt the ordinance, I’m going backward on my fund balance because I’m not paying for the cost of electricity,” Paine said. “So the answer is yes, I do want you to adopt this today. Do you have to? No, you don’t.”
Dalke called for a poll of the council. Watson and Loewen voted yes, and Dirks and McCarty voted no, tossing the deciding vote to Dalke.
After additional discussion, Dalke voted no.
“I would like to see us considering other options such as spreading higher rates in the summer months, or getting serious about demand, so I’m going to vote no,” Dalke said.
The council will consider the rate hike again at the April 7 meeting.