Jackson officials plan to raise electricity rates

~ The city administrator predicted a "very healthy increase."

Jackson residents can expect higher electric bills as city officials plan for major rate revisions.

The rate change has yet to be determined, but city administrator Jim Roach predicts it will be a "very healthy increase."

Over the next several weeks, city officials will meet with a Kansas City engineering firm to evaluate the electric rates and determine what revisions should be made. Electric rates for residents and businesses will increase by the first of next year, possibly sooner.

City officials say the combination of high fuel prices, federal energy policies on deregulation and environmental restrictions have created a competitive environment for electricity consumers.

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.

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.While electric rates should level off by 2010, Roach said, the electric rate increases over the next couple of years may be unpredictable. "The city will try to absorb some of the costs internally," he said. "But the next question is how much do we pass along to the customers?"

The city may begin implementing an increase before the end of the year so residents don't face what Roach calls a "major adjustment" in electric rates.

In December 2004, the Jackson Board of Aldermen voted to increase electric rates at the same rate as national inflation on a yearly basis. That was the first time the city used its statutory authority to raise the rates with inflation.

Unlike Jackson, the city of Cape Girardeau is a retail customer of Ameren, said Mike Cleary, a spokesman for the utility company. Cape Girardeau residents purchase electricity directly through Ameren.

Cleary said the city of Jackson negotiates with wholesale electric markets. "It's all based on competitive bidding," he said.

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.

The electric revenue offsets other taxes, said Don Shuette, director of electric utilities. The revenue supports funding to various city departments, including police, fire, parks and recreation, library and sanitation.

Cleary said that although Ameren's rates haven't increased in 19 years, Ameren customers in Cape Girardeau can also expect an increase.

"We are planning to file a rate increase later this year," he said.

That rate increase -- which hasn't been determined -- will be the same for all Ameren customers.

jfreeze@semissourian.com

335-6611, extension 246