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CU gets high marks for low electric bills

Springfield utility finishes in Top 10 in national ranking

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Results from an annual national survey of U.S. electric rates provided good news for City Utilities of Springfield.

Lincoln Electric System’s 2019 rate study ranked CU No. 9 overall in lowest electric rates, up from its No. 12 spot in 2018.

In residential rates, CU fared even better in the LES survey. The municipal utility ranked No. 3 in residential rates, based on 1,000 kilowatt-hours. The average CU customer bill in that category was $90.86, down roughly 5% from last year’s survey. Springfield only trailed Detroit, Michigan’s $87.60 average residential electric bill and Spokane, Washington, at $88.54.

The survey results provide a barometer of where CU’s electric rates stand on statewide and national levels, said Krista Shurtz, its director of rates and fuel.

“You want to know you provide value,” she said. “It helps us tell a story of being a public power.”

The Lincoln, Nebraska-based electric company has conducted the survey since 1984, said Kelley Porter, manager of corporate communications. CU has been a survey participant since 2002.

The overall ranking factors in average monthly electric bills for combined residential, commercial and industrial rates over a one-year period. Results are compiled from data supplied by 100 municipal and investor-owned electric utilities nationwide.

“We like it because they tend to use the same cities year after year,” Shurtz said of the LES survey. “They use the same usage levels of 500 and 1,000 kilowatt-hours. This particular survey does a good job of making it apples to apples.”

Boise, Idaho, ranked first overall for the second straight year in the survey, followed by Oklahoma City, Oklahoma; Baton Rouge, Louisiana; Amarillo, Texas; and Davenport, Iowa, in the top five.

Springfield also was a Top 10 performer in the 500 kilowatt-hours category, with an average residential customer bill of $51.35, ranking sixth. Spokane finished with the lowest 500 kilowatt-hours bill at $47.54.

The LES survey is the second high mark for CU this summer.

Utility costs were among the metrics calculated in a new national cost-of-living study by the Council for Community & Economic Research, published by the Missouri Economic Research and Information Center. In the survey, Springfield’s total was 85.3 on a 100-point scale. Of the state’s major cities, only Joplin fared better, at 81.5. According to the report, utilities in Springfield scored below the baseline 100 index at 87.3.

Much like affordable housing, low utility prices can be an economic development attraction, Shurtz said.

“It says that it’s a competitive place for companies to see that we have some of the lowest rates in the country,” she said.

LES started the survey as a method to benchmark the company’s rates against utilities in similar economic and demographic environments, Porter said. Prior to 2014, the rate study was performed seasonally, which compared winter rates vs. summer rates. Since then, the study is completed once a year and annual average bills are calculated.

Idaho Power Co. in Boise netted the No. 1 ranking in the LES survey. Officials with the company credit its use of hydroelectricity.

“You’re not having to pay for a source such as coal or natural gas,” said Idaho Power spokesman Jordan Rodriguez. “Your fuel source is the water.”

Over the past 10 years, the company has generated nearly half its power, on average, from hydroelectricity, Rodriguez said. Though there are peaks and valleys, generally due to low water levels, he said hydroelectricity is a big advantage to offering lower rates in the Pacific Northwest. Other forms of power, such as natural gas and coal, are difficult to compare in price to hydroelectricity, he added, due to their frequent cost fluctuations.

According to a 2017 report by United Arab Emirates-based International Renewable Energy Agency, at 5 cents per kilowatt-hour, hydroelectricity is the lowest-cost source of electricity worldwide.

The Idaho utility also is able to sell excess portions of power on the market.

“That helps us keep prices low for our customers,” Rodriguez said.

Hydroelectricity is being used to a much smaller extent in Springfield, Shurtz said. In the current fiscal year, she said hydroelectricity makes up roughly 5% of CU’s power generation mix.

In Missouri, the average retail price of electricity for consumers was $10.03 per kilowatt-hour in 2017, the most recent data year available from the U.S. Energy Information Administration. That places Missouri 29th of the 50 states but below the U.S. average retail price of $10.48 per kilowatt-hour.

Shurtz said CU aims to provide customer value to the community, and potential rate increases are evaluated annually as part of its five-year operating plan. CU’s Board of Public Utilities approved the plan as part of the expanded fiscal 2020 budget, beginning Oct. 1. The budget total, pending City Council approval, is $623.7 million, up 11.6% from its 2019 budget of $558 million. CU spokesman Joel Alexander said the budget increase is largely attributed to a planned fiber network expansion of the utilities’ SpringNet division.

“It is our goal to navigate the path that provides the most value to our community at the lowest possible cost,” Shurtz said. “That value may not always translate to being ranked No. 1 in a national rate survey, but ultimately we are focused on being No. 1 for Springfield.”

Shurtz noted CU’s electric rates have increased on average 2.65% per year, adding that is roughly equal to the annual inflation rate.

Natural gas and water utilities rates will both rise soon, beginning with the first billing cycle in October 2019. The increases – 2% for gas and 3.6% for water – are the last in a series of three annual rate increases City Council approved in November 2016.

For residential customers, based on average usage, the monthly impact is estimated at $1.53 for gas and $1.42 for water.

Web Editor Geoff Pickle contributed.

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