CU board considers rate-increase options

The CU Board held a retreat meeting Feb. 8 to discuss power supply options, including the staff-recommended construction of the Southwest 2 coal-fired power plant in Springfield.

Southwest 2 would require $697 million in financing, to be funded by a monthly rate increase of $9.63 for the typical CU residential customer beginning in October 2010. Voters rejected the local plant proposal in August 2004.

The other energy-generation option is to purchase power from an external source, costing an estimated extra $17.49 per month for each average customer.

“If you vote no, we have to do something to meet customer demand because everybody wants electricity,” said CU Marketing Director Mark Viguet. “In the last election, we felt like people maybe didn't quite understand that if you voted no, it did not mean that your electricity prices would stay the same. That's not the case.”

On Jan. 26, consultants Black & Veatch Corp. also backed the Southwest 2 proposal, determining that it would be the least costly route.

The board will vote on the options at its Feb. 23 meeting, and Viguet said most board members have indicated support for building Southwest 2.

If the board approves the local plant, Springfield City Council would vote at its March 20 meeting, and, if approved by council, it would hit the June 6 ballot.

Should the plant be rejected in any step of the voting process, Viguet said, CU would turn to the external source for energy, which would not require voter approval and would cost nearly double the expense of Southwest 2.

Opponents have suggested CU explore energy efficient management options rather than adding a plant, but Viguet said that plan would not realistically meet the energy needs of southwest Missouri customers.

“The community is growing at a pace of 20 to 25 megawatts per year, and at that pace of growth, it is not realistic to expect that an aggressive energy efficiency program would remove the need for new generation,” he said. “Over time, you can avoid some energy demand needs, but usually that is a fraction of your annual growth.”

CU customers can also expect a rate increase of about $2.07 per average residential customer this October, unrelated to the plant issue. The raise will help fund the installation of emission-control equipment at existing plants and the first installment of a long-term energy-efficiency program.

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