Marion City Council will consider raising its electrical rate for residents and businesses at its next meeting Dec. 8.
City Administrator Roger Holter told the council on Tuesday that wholesale electric rates are increasing, which will push up the cost of retail rates for residents and businesses. Altogether, Holter expects the wholesale cost of electricity to increase 2.9 percent for the city to purchase.
How much 2015 electric rates will increase for residents and businesses will not be known until the council makes a decision.
Marion is part of the 23-city Kansas Power Pool that buys electricity from wind, natural gas, hydropower and coal generating stations. The Kansas Power Pool is expected to raise energy costs for several reasons, including the cost of retrofitting coal power plants to limit toxic emissions and upgrading the distribution system for renewable energy.
The Kansas Commerce Commission has agreed to allow Westar Energy to bill consumers in advance of making $6.9 billion in infrastructure improvements over the next ten years, Holter said.
“Generally, more power is consumed on the east and west coast than in the middle of the country,” Holter said. “That’s why the Kansas Corporation Commission has approved this, because they’re saying that Kansas is a good state for creating electrical power from the wind, and if we don’t have any other way of getting the power to other states to sell it to then we don’t end up with commerce. The flip side of that means everybody in the state ends up paying additional to help build it for the future.”
Overall, the price of wholesale electricity is expected to jump from $69.49 per megawatt hour to $71.35 at the beginning of the year, a 2.9 percent increase.
“It isn’t a single thing that affects costs. It’s a variety,” said Mark Chesney, CEO and general manager of the Wichita-based Kansas Power Pool.
Although the price of natural gas has been low as recently as a few years ago, the switch away from coal to alternative energy resources has increased the demand and price for natural gas, Chesney said.
“The complexity and deliverability of natural gas is changing,” Chesney said. “The transmission has not been set up in the volumes needed for the future.”
Holter believes the Kansas Power Pool is doing a better job of forecasting the cost of natural gas in 2015 than it did in 2014.
Holter expects the price of energy to ease in the state as more renewable energy sources are implemented, including solar power.
An especially cold winter could pressure natural gas and propane prices upward, city officials said.
City council member Jerry Dieter said the cost of propane has already increased in price since September.
The city’s utility staff will present all recommended utility rates for residents and businesses Dec. 8, including electrical, water, sewer and trash services.
In other council business:
- The city’s web site now allows residents to order service online, including road, utility, and public safety work requests. Residents must provide their name and contact information, and a copy of the work order will alert the correct field supervisor as well as provide a copy to administration for follow-up.
- City officials are also considering upgrading the city’s website for $15,000 over the next three years. The council heard a presentation by Robert Disberger of CivicPlus in Manhattan, which builds and enhances government websites throughout the country.