HOISINGTON — The city of Hoisington is likely to see reduced electrical rates after the first of the year with a decrease of 15 percent in the meter and energy charge for 2013 and a reduction of an average of 19.5 percent in 2014 in the meter and energy charge if the recommendations of engineers and consultants, Sawvel and Associates Inc., are followed. At a Tuesday morning meeting, the group presented their recommendations to the Hoisington Utility Task Force.
After concern about electrical rates in the city, the HUTF was formed earlier this year. The task force is a group of community volunteers and leaders who have been meeting for several months with Joseph Herz and DeAnn Dotson of Sawvel to see what could be done about the rates.
This would be 15 percent of 7.2 cents per kwh and the $12.50 meter charge beginning with the first bill in January, 2013. The Hoisington City Council still has to approve the recommendations.
“It’s a good opportunity to adjust rates,” said Jonathan Mitchell, city manager of Hoisington. “It’s time make an adjustment.”
During the two hour presentation, Herz praised the quality of staff at the electrical plant, and staffing was at the minimum it should be. He also said the system is in really good shape, and if the city continues to maintain it as it has, they can keep current staffing levels. But, he did suggest eliminating overtime standby since the city is facing pressure to reduce rates.
In addition, each city departments will begin being billed for its usage to increase the revenue stream.
During a bit of history, Dotson told the Task Force that in 2009, the electrical fund had a negative cash balance, but by the end of this year, the city will have $600,000 in reserves, which is the recommended level.
Another way to introduce lower rates to commercial customers is with a demand charge, said Dotson. With that charge, larger customers may see a more or less of a reduction in 2014, depending upon usage.
A demand meter registers the maximum amount of electricity flow during a billing period. In addition, Sawvel recommended that the city use 2013 to develop demand charge for large commercial users.
The city’s rates were compared to Midwest Energy and Western Residential, and Hoisington’s rates were found to be higher than both. Western Residential rates were 30 percent lower, and Midwest Energy’s rates were 18 percent to 24 percent. “It isn’t a surprise to anybody,” said Dotson.
Herz did a section on renewable energy, which costs substantially more than current traditional electrical generation. Also, “current base load make it difficult to incorporate any new resources,” said Herz. “The excess capacity hinders ability to bring in renewables. Two base loads are already under utilized.”
Herz listed additional recommendations including the rate reductions. They were :
•Review rates at least once to two times yearly to make sure that the rates were keeping up with what the electrical providers are charging. This should be based on future projections.
•To improve the power supply mix and gauge the interest of customers in renewable resources.
•Even if the city decides to sell the system, to go ahead and implement the above recommendations.
The Task Force will meet again at 10 a.m. on Dec. 11 and is open to the public.