Pratt City Commissioners answered higher rate questions at their meeting February 5, 2018.
Several Pratt citizens attended the city commission meeting Monday, February 5, ready to blast city officials with their frustrations over higher bills for the last month of last year. But after a detailed explanation by Jamie Huber, Director of Electrical Utilities, of how and why the city electric rates had been changed to eliminate excess rate categories and level out charge losses, most of those in attendance were mollified to some extent.
According to Huber, for the past 8 years the city has charged customers the same low-average rate for electricity used. This average used to be called a fuel adjustment, but now is called the ECA (Energy Cost Adjustment). Because the city was absorbing rising and falling costs of electricity purchased to sell back to customers (at no profit), a severe shortage in budget funds occurred.
"When we buy energy at a certain price, ideally, when we sell it back to our customers it should equal the same amount," Huber said. "This has been going on for so many years that we incurred a loss. Our auditors recommended that we do a rate study to consolidate 20 different categories into 5, and then set our residential rate to adjust with the market. As of January 1, what we pay per kilowatt is what is charged to the customer. It will go up and down following the energy rate, similar to what the stock market does."
Huber said some residential rates actually went down, depending on how much kilowatt usage was recorded per meter. Unfortunately, many customers used an increased amount of energy in the last pay period because of extreme cold temperatures and extra Christmas lights.
"We had some very cold weather during that time and the heat energy usages added up," Huber said. "I have had 30 to 40 people come in to the city offices to complain about their bills, but when we sit down and look at the usage, some kilowatt hours doubled. The increase in bills were not all due to rate adjustment."
Pratt resident Stephanie Thompson, who attended the meeting, spoke to the commission.
"I was one of the 40 people who came in to the office," she said. "My only request is that we should have known ahead of time that this was going to happen so we could have planned for it. I never got the letter of explanation that supposedly went out with our bills."
Two more citizens spoke up, saying they were on fixed incomes and could not afford any kind of increases in their electrical bills. One woman said it would become a choice between paying her electrical bill or buying food.
Brenda Dean acknowledged that her family was capable of using a lot of electricity. They were aware of that. But when her recent bill jumped from $286 the previous month to $401 for December, she was shocked.
"If the ECA is going to be a changeable thing, how do we plan to budget for that?" she asked.
Commissioner Kumberg said the ECA was based on supply and demand. It was something the city had little control over.
"We are not trying to make up for money lost to this," Huber said. "We are just trying to move forward to break even and get ourselves in a hole."
Mayor Doug Meyer said he was in complete empathy with those who were struggling to pay their bills.
"We all are citizens here," he said. "We have all been affected by this."
Pratt business owner Danny Quint said his business and home electric bill went up more than $800.
"If everyone is affected this way it is going to shut down restaurants, stores, people won't have any money to spend," he said. "We don't want people leaving our town. We want to draw people here. This affects all of us."
Kumberg, former Pratt mayor, said the city could not go on doing business as it had for the past 8 years. Adjusting the rate structure was needed to save the bottom line.
"We just could not continue on the path we were on, artificially making these prices low," Kumberg said. "This is something that should have been fixed many years ago. It covers everybody, all of us here."
Huber said that many customers would find their bills less in the coming months, following the ECA and lighter demand in more favorable weather.