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Wednesday, April 20, 2016

Baldwin City Utility Rates

Yesterday morning, as part of my morning “read the news” routine, I made a post to the Citizens for the Future of Baldwin City Community Facebook Group to both thank the City Council for continuing a utility rate discount for another year and to encourage them to be more business friendly.

Well...it got quite a reaction. Not just online, but apparently offline as well, prompting a DID YOU KNOW… post from City Hall. It’s already clear to me how super-sensitive this topic about utility rates are in town, so I tread carefully as I write.

Let’s get this out of the way, I am NOT attacking any city staff member, nor any department. I’ve found our City staff is full of really awesome, hard-working people that really care about doing the right thing. I’m simply trying to convince the City Council that Economic Development needs to happen and we need better policies to become a more business friendly town.

Rob Culley, Baldwin City’s Power Plant Superintendent, by way of Laura Hartman, City Clerk, shared some up-to-date information about the average price of electricity with me. Suhweet! Thanks, Rob and Laura! So, I did what every data-loving nerd would do - I dove into the numbers and researched the claims. Now, the fun part - sharing what I’ve learned.

First off, it’s important to know which segment we’re comparing. Per Baldwin City codes, there are several. No worries, I did the work for you. Keep reading.

Are we business-friendly?

According to the current City Codes, business fall into a rate segment based on usage. As to be expected, the higher the usage the lower the rate.

The first usage tier starts at 90,000 kilowatt-hours. That’s the power consumption of 1,667 refrigerators. So, it’s safe to assume that most of our local businesses pay the business rate.
Ok, so how do we compare? Baldwin businesses pay 15.6% higher rates than the national average. Much better, but still not something we can brag about as a community.

But is this a fair comparison?

Rob brings up a great point - there are too many factors that affect a region’s electric pricing. So, what’s a fair comparison? I, too, want a really good apples-to-apples comparison here - that is the point afterall.

So for our region (includes IA, KS, MN, MO, NE, ND, SD), Baldwin businesses pay 32.5% higher rates than the regional average. Compared to the state, Baldwin businesses pay 16.2% higher rates than the state average. Compared to other similarly-sized municipally-owned utilities - I happen to have a facility in Eudora - Baldwin businesses pay 14.8% higher rates than the Eudora’s businesses.

KCP&L’s pricing is very complicated. So, I took my January utility from Baldwin City of which $387.19 was electric (pre-tax) - and compared it to KCP&L. My KCP&L bill would have been $366.44. That’s only a 5.7% difference in my case, but that’s not indicative of all Baldwin businesses. Ok, two more final points about KCP&L: (1) KCP&L doesn’t restore power as fast as our Baldwin City crew and (2) KCP&L doesn’t invest its profits in town.

Regardless...my point is, even with updated information. Even as much as I support our Baldwin City Power Utility, we’re simply not competitive. This is something the City Council needs to fix.

But what about residential rates?

Well, the point of my original post was about business rates. But what they heck...let’s look at residential rates while I’m at it.

Here’s how it breaks down. Baldwin residents pay 4% less than the national average and 3.2% lower rates than the state average!

However, when compared to our region, Baldwin residents pay 12.1% higher rates and 20.6% higher rates than Eudora. I don’t have a sample bill to compare rates with KCP&L.

Conclusion

Personally, I think Eudora represents our best apples-to-apples comparison. They are both municipally-owned. Both are similar in population. Both have similar infrastructure density per mile. Both are close enough to minimize differences in regional cost differences. Unfortunately, compared to Eudora, our businesses pay 14.8% higher and our residents pay 20.6% higher.

A couple final notes

In a comment on my post, I wrote, “In 2015, the average power cost adjustment was .0564 per kwh.” That number in the City Codes is actually, the 2015 Base Average Cost for Baldwin City. This number represents the wholesale cost of electricity delivered to your door in 2015 and is used in the 2016 Power Cost Adjustment calculation. The average PCA adder in 2015 was only $0.0072. Thanks again to Rob for the education.

Update 4/22/2016 - I was told that Eudora and Baldwin are not a fair comparison, because Baldwin has two power plants to maintain. That same individual recommended Osage City as a better apples-to-apples comparison, since both have two power plants. According to the Osage City Utility Billing page, Baldwin's rates are 30.6% higher.


Mike Bosch
Baldwin City, KS

1 comment:

  1. Just an FYI, Lawrence residential customers pay 7.5 cents per kilowatt hour. Baldwin residents pay 11.5 cents per kilowatt hour.

    ReplyDelete

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