After the increases

When the final electric rate increase was implemented last month in Jackson, residents and business owners were faced with utility bills that jumped almost 40 percent within the past six months.

City administrator Jim Roach said he doesn't expect any additional rate increases.

"I don't have a crystal ball, but I feel pretty confident that we'll see some reduction in prices within a few years," Roach said. "I don't think we will have any more rate increases unless something crazy happens that would impact the energy market."

Future electric prices for Jackson residents and businesses should be cheaper than those in surrounding areas within the next few years, Roach said.

In September, the city's board of aldermen voted to implement a series of three 12 percent rate increases, which Roach said were necessary due to the rising costs of electricity. The first rate increase took effect Oct. 1.

Jolene Hancock, who lives in a three-bedroom house in Jackson, saw her utilities soar to more than $200 on the last two months' bills.

"We've never seen a bill higher than $130," said Hancock, who has lived in the same house for six years. "That seems like it's too much for the size of house we live in."

Darlene McLemore has lived in her house on Oak Street for 20 years. She's never seen a utility bill as high as it was in December.

"That bill was like $180, and it's usually only about $100," McLemore said. "My husband and I are both retired, but I drive a school bus, so that extra check is helping us pay our bills."

Before the Jackson Board of Aldermen voted to implement the rate increase, consultants with Burns and McDonnell of Kansas City, an engineering firm, conducted an electric rate study in the city. The consultants presented two options the aldermen could approve to help offset increasing wholesale electricity costs.

The first option was to implement a series of three 11 percent rate increases and eliminate the early pay discount program. The second option, which was approved by the aldermen, was to implement three 12 percent rate increases and continue the 10 percent discount for residents who pay by the 10th of the month. When the second option was approved, businesses lost the opportunity to receive the 10 percent early pay discount.

"It was really a double whammy for us," said Irmagard Siemer, who owns Siemer's Best Brands Plus at 113 S. High St. in Jackson.

However, the increased electricity costs didn't surprise Siemer.

"First it was the gas prices that went up, and now it's the electric rates. It's unbelievable, but it's happening all around us," she said.

The Jackson School District also lost the option of receiving the 10 percent early pay discount.

Superintendent Ron Anderson said the school district has already spent 30 percent more on electricity this year than it has in previous years. The district budgeted $520,300, which is 30 percent more than last year's budget, for the fiscal year, which ends July 1.

"It's pretty much right on track to what we had anticipated," Anderson said about the increased costs. "As long as we don't have extreme heat during the last couple of months, we should come out pretty much where we had budgeted."

Due to rising costs of natural gas in the last few years, the school district had been working on ways to conserve energy, such as replacing or adding insulation, winterizing doors and windows and controlling the heating and air conditioning. Since the cost of electricity has gone up, the district will work on even more ways to conserve, Anderson said.

"The big thing is controlling the heating and air conditioning," he said. "The areas of the school that aren't being used during the summer, we won't keep them as cool."

The biggest consumer of electricity in Jackson is the city itself, which supplies electricity for traffic and street lights, all city offices, including the fire and police stations, as well as city parks.

While the city has owned and operated its own electric distribution plant for more than 100 years, Jackson is a wholesale customer of electricity. Its plant only distributes electricity during peak hours or if costs are too high at coal power plants, which is where the city receives its electricity.

"We only run it when it's economically beneficial for us," said Don Shuette, director of electric utilities. "We'll run our generators in the extreme hot summer months or extreme winter months."

Large generating units can produce electricity cheaper than small diesel or natural gas units like Jackson Power and Light, Roach said. "Jackson customers would pay much more for electricity if we relied solely on our small units for all our energy needs," he said.

Roach said the city's electric bill went up 60 percent compared to the 40 percent increase Jackson's residents and businesses experienced. "We absorbed most of the increase internally and didn't pass it on to the customers," he said.

The city did that by delaying several street projects, equipment purchases and the hiring of personnel.

"We certainly didn't put off anything critical that had to be done, but we certainly held off doing several things to keep costs lower for the customers," Roach said.

The city of Cape Girardeau is a retail customer of Ameren, which filed for a 17.7 percent rate increase with the Public Service Commission in July. Unlike Cape Girardeau, the city of Jackson must negotiate with wholesale electric markets when purchasing electricity.

Jackson's contract with Ameren Energy Marketing expired last year. In January, it signed a new contract with the Missouri Public Energy Pool, an electric supplier for 30 cities across the state.

MoPEP is part of the Missouri Joint Municipal Electric Utility Commission, which isn't controlled by the Missouri Public Service Commission. It can construct, operate and maintain generation and transmission facilities. The commission also can enter into contracts for power supply, transmission service and other services necessary for the operation of an electric bill.

As a member of MoPEP, the city will become a voting member in the energy consortium.

"We'll call the shots with the other cities when it comes to contracts we want to get involved in," Roach said. "I think the future of electric rates in Jackson looks good. In our situation with MoPEP and the ability to buy energy as a group, we're going to be able to buy energy cheaper in the long term."

jfreeze@semissourian.com

335-6611, extension 246