The Hillsboro City Council unanimously voted to have the city attorney draw up an ordinance to increase the electric rate at their meeting on Tuesday, Jan. 3 after hearing from Brooke Carrol of Kansas Power Pool. Carrol recommended three electric rate changes based on a surcharge imposed by KPP after a cold snap two months ago that caused power rates to rise.
Each option included converting the current electric surcharge to a permanent part of the rate and increased the base charge from $12.10 per customer to $14.50 for residential and city internal and $17.00 for Commercial and Out of Town Residential. The total final rate for each option would be $.1395 per kWh.
The proposed rate of $.1395 per kWh represents a 7.7% increase on the consumption side.
Despite the increase, the proposed rate is very competitive for municipalities according to City Administrator Matt Stiles.
Stiles explained that in each scenario, the end rate is the same however the amount of time to achieve that result varies. That time can be critical especially in the case of failure of a large piece of infrastructure. Any of the proposed options would eventually meet the financial goals of the electrical fund. However, the sooner that can be accomplished, the better position the utility is in. Risk of underfunding the utility is high especially considering more extreme weather patterns and the market for electrical equipment. The dramatic increase in cost and drop off in availability of replacement parts combined with unpredictable weather could create a disaster.
“All the situations will impact users, especially those commercial users on the higher end,” he said.
Stiles explained that of the three options presented, Option 1, to add a $.01 per kWh in 2023, puts the city in the best position to meet its financial goals in the shortest amount of time.
The other two options are smaller increments but would occur more than once.
“The city hall staff have expressed concern that continually raising the rates creates a bigger perception issue as people feel they are continually nickel and dimed,” Stiles said. “Staff would recommend moving forward with option 1.”
There has not been an increase since April of 2021 when rates were raised after a cold spell that caused a steep raise in rates.
The council voted to move forward with the first option and the city attorney will draft an ordinance for the Jan. 17 meeting for approval. If approved, the increase will appear on March bills.
In other business, the council:
* heard about the power outage on Dec. 22. which started at 4 p.m. and lasted until city circuits were powered back-up around 7:15 p.m. The outage was county wide and had to do with Evergy’s new substation. Stiles said they had no official report but the team on site indicated it had to do with a large transformer in the substation. The city opened the city hall as a warming station. Stiles thanked Hillsboro Fire Chief Ben Steketee and Mayor Lou Thurston for helping answer phone calls and staffing the warming station.
* learned more about the water pipe breaks around town caused by both extreme cold temperatures and water system issues from the Marion Reservoir. There was a break at the hospital in the fire suppression system, Tabor had several breaks including at the townhomes and men’s quad, Hillsboro Mennonite Brethren Church had a fire line rupture causing water to flood the church for several hours, and there were many other freeze breaks that were on the resident’s side of the water meter. Hillsboro Fire Department and city crews both helped with the issues.
Stiles said the biggest issue the water system had was at the Marion Reservoir. As the water got colder, large schools of fish began seeking deeper water and clogging our intake structure. With the assistance of the Corps of Engineers we were able to do a controlled release to clear many of the fish out of the system.
* heard that the deadline for the Community Development Block Grant has been moved by the state from February 1 to May 1. The plan is for the new daycare facility (H4C) to be submitted at that time.