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Wednesday, October 03, 2012 11:14 PM

Pomona City Council discusses 40-percent power price increase

By DOUG CARDER, Herald Senior Writer

POMONA — Rick Smith had a message for Pomona residents Tuesday night.

The Pomona City Council has no intention of raising the city’s electric rates by 40 percent, council member Smith said during the council’s meeting at Pomona City Hall and Community Center, 219 W. Jefferson St., Pomona.

“[Kansas City Power & Light Co.] is raising our wholesale rate from 5.4 cents per kilowatt hour to 7.3 cents per kilowatt hour, which is about a 40-percent increase,” Smith said. “There are some elements in the community that would have you believe we are planning to pass that 40-percent increase on to our customers, but that’s not true. I have never heard anyone on the council suggest we increase our rates by 40 percent.”

Instead, Smith said, the council’s focus has been on exploring all its options in order to pass along as little of KCP&L’s wholesale rate hike to the city’s electric utility customers as possible.

As a third-class city, Pomona, which owns its own electrical infrastructure, is subject to the wholesale rates of an electric utility provider — in this case KCP&L. How much of KCP&L’s 40-percent rate increase would be passed on to residents has not been determined.

While KCP&L’s rates, which are regulated by the Kansas Corporation Commission, can change in other cities on a yearly basis, Pomona’s contract is up for renegotiation every five years because it is a wholesale purchaser and cannot be renegotiated until that time period elapses, according to previous council discussions.

The 40-percent increase was essentially out of the city’s control, Smith said at a September council meeting. The city’s contract with KCP&L was renewed in June, and the rates are expected to increase in January.

The city currently has about $614,000 in its electric fund, some council members noted Tuesday.

Smith and other council members discussed wanting to keep about $450,000 to $500,000 in that fund, as a contingency in the event a tornado, ice storm or other natural calamity would wreak havoc on Pomona’s electrical system.

Jim Robinson, city superintendent, pointed out that “$500,000 doesn’t go very far anymore” when looking at the cost of repairing electrical infrastructure in the event of a natural disaster.

The city makes little profit from its electric utility, Smith said, but revenues generated from the utility pay for about 60 percent of the services the city provides — allowing the city to keep its property tax mill levy constant.

Smith said he was compiling a spreadsheet, which he plans to present at a coming meeting for council members to review. The worksheet would show potential rate increases — expressed both in percentages and dollar amounts, which he said would allow residents to calculate their electric bills.

Jerry Johnson, council member, said he thought it would be beneficial for customers to see the numbers expressed in dollar amounts as well as percentages. And Carole Hopkins, council member, said she would like to see a way to set the rates to reward customers who save energy.

Doug Carder is senior writer for The Herald. Email him at dcarder@ottawaherald.com

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