Council signs off on electric rate hikes

With a 7-2 vote, Springfield City Council last night approved proposed electric rate increases for residents and businesses in fiscal years 2015-17.

The vote allows public utility provider City Utilities of Springfield to increase rates 5.9 percent in fiscal 2015, 3.9 percent in fiscal 2016 and 3.7 percent in fiscal 2017. CU’s fiscal years begin in October, meaning the rate hikes are expected to begin in October 2014.

CU has said residential customers with average usage will see their bills increase by $5.41 per month in fiscal 2014, and by $3.75 per month during the following two years.

The increases are designed to cover the cost of federally mandated upgrades to CU's coal-fired plants and keep pace with the cost to serve customers, according to CU officials who spoke at the Aug. 26 public hearing. Based on information provided to council in the bill, environmental compliance initiatives and a rail loop expansion at the John Twitty Energy Center are projected to cost CU $42.7 million.

In 2010, electric rates increased 18 percent, with 2 percent to 3 percent rises in the years since, and in October, the first in a series of water rate increases will take effect. The previous rate increases were spread out over three years at council’s request due to the economic conditions and the impact those increases could have on the community. Councilwoman Cindy Rushefsky said for many, those challenges remain, echoing the concerns of 10 public speakers who opposed the hikes at the Aug. 26 public hearing.

“We’ve asked (CU) to stagger the increases, and it has done that. But we have not denied the rate increases it has asked for, even in the heart of the recession,” Rushefsky said to council members ahead of her ‘no’ vote. “I am asking for a one-year reprieve – an opportunity for more Springfield citizens to catch up and catch their breath – to see if our economic recovery can reach a little further down. I’m doing it because I think CU is quite capable of functioning without damage for a year without a rate increase. I have a lot of confidence in the intelligence, the management ability and the inherit good faith of City Utilities management and staff.

“But, I do want to see if they have the vision to look behind utility bills and see the people who pay them."

Councilman Doug Burlison agreed and voted with Rushefsky against the increases.

“I see the struggles of people trying to make it day to day. It is not an isolated situation. You could almost say it is epidemic,” Burlison said.   

However, the majority of council felt the rate increases were necessary given CU’s charge to provide reliable and affordable energy to the community. Both Mayor Bob Stephens and Councilman Jerry Compton said the hikes were needed and that Springfield would continue, even with the increases in place, to offer lower rates than many other areas of the country.

“I believe frustration over rate increases should be directed to standards that are enacted without regard to the economy or current technology,” Compton said.