An update of city electrical rates will cause some account payments to go up, others to go down, as the city of Pratt works to simplify charges.
In a move to simplify electrical rates and in- crease transparency, Pratt City Commissioners ex- pressed support for the re- sults of a rate study re- cently completed by En- ergy Management Group (EMG) and explained at their Monday meeting last week. A rate study for the city of Pratt had not been done since 2006.
EMG representative Scott Schreve presented
slides and outlined ineffi- ciencies and changes that should be addressed to al- low the city to better serve their customers.
“This makes us aware that we need to tighten up on some policies,” Schreve said. “This is a very trans- parent way for us to begin billing for losses due to in- efficiencies in the current system.”
The result of the study was that the city will now have five rates instead of the 18 rates in the old structure. All citizens in
the same rate class will now pay the same cost per kWh, no matter how much electricity is used, eliminating confusing steps found in the old structure.
Pratt customers can expect some changes in their payments as earning adjustments from cost of power purchases are passed along with the new structure. Some charges may go up, some may go down, but in the long run, the city is hoping there will be savings for all.
The parameters of the new rate structure will be designed to make it easy to understand which rate should apply to each customer. The new rates are projected as follows:
1. Residential: Electric services supplied at one point of delivery through a single meter.
2. Small Power: Electric service supplied at one point of delivery through a single meter and consumes a demand of less than 150 kW.
3. Medium Power: Electric service supplied at one point of delivery through a single meter used for a de- mand greater than 150kW, but less than 200 kW.
4. Large Power: Electric service supplied at one point of delivery through a single meter and consumes a demand greater than 200 kW.
5. Wholesale Power: Electric service supplied at one point of delivery through a single meter consumes a demand greater than 500 kW and owns a distribution system.
To better define what the charge is, EMG made a recommendation to change the Fuel Adjustment (FA) to an Energy Cost Adjustment (ECA). Pratt will calculate the ECA on a monthly basis. The new formula will allow the city to better collect and explain the origin of costs. The new ECA will be figured using the following formula.
Total Cost of Purchased Power + Total Cost of Generation + Other Associated Energy Cost divided by To- tal kWh purchased + Total kWh generated = Average Cost per kWh.
Average Cost/kWh X (1+*city losses %) = Adjusted Cost/kWh
Adjusted Cost/kWh- Base$/kWh (currently $0.03) = ECA rate
“This was a real eye- opener for me to see how complicated our rate structure has been,” said Mayor Lucas Kumberg. “The impact of a new policy will be minimal as we spread rates out over a multitude of customers. It will allow us to use our tax dollars in the best way possible. That is our goal.”
Pratt figures city losses every year which include street lighting, traffic lighting, Christmas lighting and distribution system losses.
Pratt Director of Electrical Utilities Jamie Huber said his department was shooting for an ordinance change, based on EMG recommendations, ready for approval at the next city commission meeting, with billing changes ready to implement by the new year.