Jackson's electric rates could jump a third

Tuesday, August 15, 2006

Jackson residents and businesses will pay 33 percent more for electricity over the next six months if city officials approve a major electric-rate revision plan.

City officials say the combination of high fuel prices, federal energy policies on deregulation and environmental restrictions are the cause for higher rates.

At a study session Monday a Kansas City engineering firm presented the aldermen with suggestions for the proposed rate adjustments. The suggestions include three 11.5 percent increases, with the first increase on the Oct. 1 electric bill. The following increases would be included in January and March bills.

The engineering firm also suggested the aldermen increase the $5 meter-reading fee to $7.50 and discontinue the 10 percent early pay discount.

The rate increases would be across the board, meaning homeowners, businesses and industries would pay the same rate increases, city administrator Jim Roach said.

Jackson isn't the only city in Missouri increasing its electric rates. Residents in Farmington saw their town's electric rates jump 45 percent over a five-month period.

"I don't think it's as bad as we thought it would be. It's something that's happening across the country," Roach said.

Jackson, which operates its own electric distribution plant, is a wholesale electricity customer. The city buys electricity from Ameren Energy Marketing, which is a subsidiary of Ameren, and sells electricity to its residents.

Municipalities have the option of operating their own electric distribution plants. Jackson Power and Light has served the community since 1905. The utility that produces Jackson's electricity generates a large portion of revenue for the city used to support various city departments, including police, fire, parks and recreation, library and sanitation.

Roach said the city would not receive any additional revenue from the increased electric rates.

"We are going to absorb what we can," he said. "Even with this increase, we're going to be doing some belt tightening in-house to absorb a little more."

Alderman Dale Rauh asked Roach if it was absolutely necessary to eliminate the 10 percent discount residents receive for paying their bill 10 days early.

About 75 percent of Jackson residents utilize the discount program, which amounts to approximately $800,000 annually.

To continue the discount program, Roach said the city would need to add an additional 7 percent to electric bills.

When the city's contract with Ameren Energy Marketing expires at the end of the year the city will sign a new contract with the Missouri Public Energy Pool. An electric supplier for 26 cities across the state, MoPEP will be the cheapest supplier for Jackson, Roach said.

In July the largest provider of electricity in Missouri, Ameren UE, proposed a rate increase that differs from Jackson's in some key details.

If approved by the state's Public Service Commission, Ameren's rate increase would raise electric bills by an average of 17.7 percent. But the increase is tiered so different classes of customers would receive different rates.

The increase for homeowners would be capped at 10 percent. Retail customers would see a rise of 23 percent and industrial consumers an average rise of 29 percent.

Ameren spokesman Mike Cleary said it shows that prices are going up across the board.

"We're in a different situation than Jackson is, but it shows that everybody is facing gargantuan increases in paying for the basics," said Cleary. "Transformers, wire, underground cable, fuel for the trucks, they've all increased in cost tremendously in recent years."

Cleary said Ameren felt a blanket increase for all customers would not have been fair. "Residential customers just don't have the ability to recoup costs that businesses do, so that's why we proposed a 10 percent cap."

The city of Jackson will hold a public hearing on the electric rates at 7:30 p.m. Monday. A representative from MoPEP and the Kansas City engineering firm that evaluated the electric rates will be present at the public hearing.

Staff writer TJ Greaney contributed to this report.


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