HOISINGTON — The consultants hired to study Hoisington electrical rates made a very preliminary report to the Hoisington Utility Task Force on Tuesday.
Joseph Herz, vice president of Sawvel, said that they looked at rates of one other area utility as well as looking down the road at 5-7 years, so that revenue projections, operating expenses and future sales would all be important in assessing rates.
“You have to be really careful with rate comparisons; be vigilant comparing apples to apples,” Dee Ann Dotson of Sawvel said.
The findings include that the electrical utility company is well maintained, in excellent condition and had no complaints of service reliability.
“What we heard were concerns about city rates versus the surrounding area,” said Herz. “City rates were higher. The question is if rates can be made more competitive.”
In their presentation, they discussed having differing rates for summer and winter, as well as having a demand charge for commercial users, which means that the highest rate of electrical flow during a billing period will be billed for.
The city has some debt that will be paid off in the future which can help with the rates. Sawvels’ preliminary conclusion was that the city base electric rate could be brought down as well as making improvements in the cities mix of resources.
”Coupled with base rates, we think the rate system can be competitive with neighboring communities,” said Herz for their preliminary findings.
Hoisington City Manager Jonathan Mitchell asked, “If the utility cannot be competitive what would it take to sell it?”
Mitchell said that he was encouraged by the financial analysis and that the utility could handle cuts in rates. “It’s a draft road map for the future. I thought it was an encouraging meeting.”
The Task Force also requested that comparisons be down with more than one utility.
Since the findings were preliminary, Sawvel will present final results in the near future. Any changes in rates or structure to the electrical utility must be approved by the Hoisington City Council.
Brian Wilborn, member of the Task Force and City Council, said that the council wants to be prepared for the future, unlike in 2008 when contracts were signed. The next meeting will be in November.