HOISINGTON — Holding the line on the cost of electric power in any Kansas community is a daunting task. As fuel costs increase, so does the cost of electric generation. That’s something that doesn’t normally appear on a monthly electric bill, however, and the customer usually isn’t happy with the explanation.

Last September, residents in Hoisington weren’t happy with the bills they received and let their elected officials know. To them, it didn’t matter that the state was hit with a higher-than-normal temperature cycle the month before. 

But the price of natural gas — one of many factors going into the cost of electricity — is expected to spike again during the winter months of 2023. City officials in Hoisington and across the state are resorting to a variety of measures to mitigate the increasing cost of purchased power, a big chunk of a monthly electric bill.

Hoisington City Manager Jonathan Mitchell said that some of those out-of-the-box measures have been going on for a while.

“A thing that we’ve done internally is to make changes to our staffing structure,” Mitchell said. “We’re reducing staff; trying to be as lean and mean as we can and still get things done.” 

Fifteen years ago, Mitchell said, city employees numbered 41 in the community’s various departments. That number has since been reduced to 27.

“We’re always taking costs and purchases very seriously,” he said. “But prices are rising everywhere; it’s across the board.”

The rate picture

The charge on the monthly electric bill is actually the result of several inputs and rate factors that aren’t easily visible to the consumer, Mitchell said. At the base are the purchased power agreements that the city uses to supply most of its consumable energy on the grid. 

As a member of the Kansas Municipal Energy Power Pool, the bulk of that resource comes from hydroelectric generation from the Grand River Dam Authority. Hoisington’s contract with GRDA expires some time in 2026, Mitchell said.

“We’ve tried to look at our power purchase agreements, but even with those changes, we’ve seen a huge spike in most of our purchased power,” Mitchell said. “And after doing some research on rate structures around the state, we found out that our meter charge was way under market. We took strides towards that and we increased our base rate to 12.61 cents per kilowatt-hour.”

With a rate increase, the city implemented a Power Cost Adjustment that first hit the bills on the September billing cycle.

“We don’t just have to pay for the energy, but we’ve had to absorb a rise in costs to keep our own equipment up and running. We’ve tried to do that for about a year and a half and we just can’t do that any more,” he said.

The first PCA figured for the month of August — which with July included a string of very hot days — was 4.5 cents. “That was too high,” noted Kim Loesch, a local accountant who is also Hoisington’s deputy clerk. “We actually charged 2.7 cents but that number was big, too.” 

“We’ve figured out that the months where you have the highest cost are, unfortunately, where you see your highest usage,” Mitchell said.

Their answer since then is to develop an in-house spreadsheet that computes a rolling average using data inputted monthly, to help spread the cost out throughout the year.

“The hope is that by doing the rolling average, we’ll kind of smooth things out,” Mitchell said.

In the meantime, Mitchell said, residents should be advised to control their own electricity usage in an effort to keep bills down.

“Electricity usage isn’t like water, where if you have a leaky faucet you can see where it’s going down the drain,” Mitchell said. “Say you have a garage refrigerator and it’s 100 degrees or more, that fridge is running non-stop. During the winter, you turn on your heat and you also fire up that little Amish heater.”

“It’s the energy-suckers that get ya,” Loesch noted.

The road ahead

With winter looming, Mitchell expects to have the city’s bases covered. 

“I think on the electric side of things we’re just trying to make sure that we have reliable sources for our energy,” he said. “We do have that through our long-term purchase power agreements that give us a nice base load. When it’s advantageous we look to purchase from different markets. With KMEA, we’re in with 84 other cities and so we get some buying power with that.

“All we can do then on the electric side is make sure that our infrastructure is reliable and ready and make sure we have access to the power,” he said. “We are not a locally-owned gas utility so we are subject to some volatility there.”  

Mitchell emphasized that city employees and even the community’s governing body are in the same utility boat as its residents. “They are all Hoisington residents; they all pay the same rates as everybody else. We are all customers and we wouldn’t want to overcharge ourselves.

“It’s kind of like a high-wire balancing act sometimes, but it’s all worth doing,” he said.