CU proposes power plant ballot issue

Council heard a first reading bill that would put a $615 million bond issue on the June 6 ballot to build a 300-megawatt plant at City Utilities’ Southwest Power Station.

CU also requested an electric rate increase to take effect in October 2010, when the new plant is on line. The rate hike would raise the average residential monthly electric bill by $9.63, according to CU officials.

If council approves the rate increase at its March 20 meeting, it would take effect only if voters approve the Southwest 2 plan.

Fred Marty, chairman of the plans and policies committee for the Board of Public Utilities, said the rate increase is necessary and urgent in light of a similar power plant proposal that failed in November 2004.

“When the CU board came to you seeking approval for a bond election to build Southwest 2, Springfield was growing at a rate of (more than) 2 percent annually,” Marty told City Council.

“That election was defeated, and two years later, the city’s growth has not diminished,” he added.

CU Director of Pricing Ray Ross said that even with an increase of 15.6 percent in residential rates, and a rise of between 17 percent and 26 percent in commercial and industrial rates, CU rates would remain competitive.

“In the last 15 years, CU customers have paid about 64 percent of the national average price of electricity,” Ross said. “The average price nationally has hovered around 7 cents per kilowatt-hour since the early ‘90s. With these rates in effect, CU customers will not average 7 cents per kilowatt-hour until 2015.”

He added that if CU were to buy electricity from another source to meet the need, the average residential bill would increase by $17.49 monthly.

Ten people spoke in opposition to the plan, citing increased pollution from coal, a lack of focus on conservation efforts, and the plant size and costs.

“To build such a large coal-fired power plant will make it difficult for CU to adopt more environmentally benign sources of power that are just over the horizon,” former Springfield Mayor Paul Redfern told council.

“I don’t want Springfield to be coming in through the front door while everyone else is leaving by the back door.”

The council is expected to vote March 20 whether to send the issue to public vote.

CU also proposed a second electric rate increase to take effect in October of this year, not related to the new power plant or its costs.

The extra revenue from the 3 percent price hike would be used for upgrades at the two existing power stations – Southwest and James River – to help meet new federal emissions requirements.

Also at the meeting:

• Council approved an agreement with Urban Districts Alliance to help fund the Commercial Street Historic District redevelopment plan. The plan, presented to council in November, uses techniques similar to those used in the revitalization of downtown Springfield.

Proposed uses in the Commercial Street district include restaurants and cafés, coffee shops, music stores and live music venues, antique and gift shops, public open space and a farmers’ market. City staff will be working with UDA leaders to plan a project budget.

• The redevelopment plan for the $15 million to $17 million College Station project received final council approval.

The plan declares the land in the development blighted, allowing the city to offer property tax abatement to developer Scott Tillman and his College Station Redevelopment Inc.

The tax abatement, which expires in 25 years, will help fund construction of a 417-space parking garage and commercial facility.