Jamie Munks
The State Journal-Register
Springfield aldermen on Tuesday approved a City Water, Light and Power electric rate restructuring that customers will see phased in on their bills over the next four years.
The restructuring aims to smooth out CWLP’s electric revenue throughout the year, making the city-owned utility less dependent on weather and usage and resulting in more even customer bills month-to-month, with fewer seasonal peaks and valleys.
The city council passed the revised rate plan by a vote of 8-1, with Ward 5 Ald. Andrew Proctor casting the lone “no.” Ward 7 Ald. Joe McMenamin voted “present.”
Opponents urged the council to find an alternative to the plan, which increases the fixed customer charge and drops the energy usage rate, contending it reduces the incentive to conserve electricity and could have detrimental environmental effects.
The first increase to the fixed customer charge will take effect Jan. 1, with additional hikes to follow in the three subsequent years.
The change will have varying effects on customer bills, with the largest electricity users standing to gain the biggest savings due to the decrease in the energy usage rate. Smaller residential customers may see their monthly bills increase by the time the phase-in is complete in 2019, by 30 cents to as much as several dollars, depending on how much electricity they use.
McMenamin again said Tuesday he thought the rate restructure deserved a harder look, and took issue with the fact that aldermen were presented with the plan just two weeks before the planned vote.
“After probably six months of study by City Water, Light and Power, it’s been presented to the city council with two weeks to look at it. And the same amount of time for the public,” McMenamin said. “And I think we could have come up with a better product, had we worked together for a longer period of time.”
Moody’s Investor Services last month decided against downgrading CWLP’s electric fund bond rating, but it changed its outlook from stable to negative based on the utility’s “consistently weak financial position.” The city’s corporate fund — which pays for most day-to-day operations and services — had to bail out CWLP’s electric fund after the city fiscal year ended Feb. 28.
CWLP has missed its debt-coverage obligations once in the past four years and received a roughly $3 million bailout earlier this year, allowing it to narrowly make its debt obligations.
The restructuring passed with an amendment that bumps up from the original proposed minimum threshold for low-income seniors to qualify for a lower rate. Single people aged 62 and over with an annual income of $35,310 or less and two-person senior households with annual income of $47,790 or less qualify for the lower rate, based on the ordinance passed Tuesday.
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Joe McMenamin for Ward 7 