City Beat: CU's natural gas rate proposal draws public criticism

The utility reiterated its stance first stated at council’s April 1 luncheon: CU needs a 4.1 percent increase in natural gas base rates, which would raise the average residential bill by $3.91 per month. The bill for the average general service customer – a group that includes nearly all business and industrial customers – would increase $14.58 per month.

Utility officials say the increase would fund an additional $5 million needed to pay for increased natural gas purchase costs and infrastructure improvements required by state regulators.

CU General Manager John Twitty said the increase would help the gas system pay its own way; he noted that the gas utility has operated at a loss in four of the last six years, forcing CU to subsidize the system with electric revenues.

“You don’t want to do that for a long period, because it means that the electric rates are higher than they should be,” Twitty told council. “We want to keep all of those costs as low as we possibly can. The easiest way to do that is to have them pay their own way.”

Eight members of the public voiced concerns about the increase. Robert Burnett, pastor of Central Baptist Church, said he worries that the utility’s conservation efforts are penalizing those who use them.

“They want us to conserve energy and cut back, and then they penalize the citizens of Springfield for cutting back because they’re not selling as much gas as they anticipated they would,” Burnett told council. “What will CU do if citizens like me get more angry and continue working to lower the bills and they don’t sell as much gas as they anticipated? Are they going to come back next year and ask for another rate increase? It’s just wrong.”

Twitty said he doesn’t think the utility’s incentive programs penalize consumers, noting that 73 percent of the natural gas rate comes from the cost of the fuel itself.

“If you use less of the commodity, your bill is going to be less, and that’s what we’re trying to encourage customers to do,” Twitty responded.

Twitty also reiterated that the utility doesn’t have much room to safely cut its $702 million 2008 budget, pointing to the fact that CU’s average rates are 20 percent lower than state and national averages.

Council is expected to vote on the proposed rate hike at its April 21 meeting.

Meeting summary

• Council approved a resolution to reserve several city-owned properties near the Roy Blunt Jordan Valley Innovation Center for JVIC-related uses.

The city had originally purchased the four acres for use in developing Jordan Valley Park, before the city and Missouri State University decided to partner to develop JVIC.

Allen Kunkel, MSU’s assistant vice president for economic development, said the property could be used for potential new tenants. He said JVIC has seven corporate affiliates, and MSU is “talking to a couple more to come on board, and we’d need to accommodate them somehow.”

Businesses at JVIC employ 35, Kunkel said, with an average salary of $55,000 a year.

• Council approved the Commercial Street Tax Increment Financing Plan, which allows the city to capture 100 percent of new property taxes and 50 percent of new sales taxes from the Commercial Street district.

The recovered tax money will be used to update the infrastructure in the district and encourage development of unoccupied buildings that the city has called unsafe and an economic and social liability.

Work on the plan began in 2004, when the revised Vision 20/20 plan called for Commercial Street to receive the same type of attention paid in recent years to the downtown area. [[In-content Ad]]