The State Journal-Register
Given last week’s vote by the Springfield City Council to restructure municipal electric rates with pitifully little debate by aldermen or input from ratepayers, it’s little wonder there is a renewed push for citizens to play a larger role in oversight of City Water, Light and Power.
And why shouldn’t CWLP customers have some kind of representation at the table? After all, it’s a public utility, and they have a stake in its future.
Yet calls for citizen oversight, by a panel independent of the city council with understanding of utility management and power markets, largely have fallen on deaf ears by city leaders who for years lacked the will or the knowledge to get a handle on the utility’s finances and anticipate future needs.
Aldermen voted 8-1 in favor of a rate restructure plan that will be phased in for electric customers over four years beginning Jan. 1. They and the public had two weeks to review the plan prior to Tuesday’s vote — a fact that only one alderman, Ward 7’s Joe McMenamin, acknowledged at the meeting. In the end he voted “present.”
CWLP leaders and Mayor Jim Langfelder said restructuring is necessary to stabilize the utility’s electric fund. The approved plan increases the monthly fixed customer charge and drops the energy usage rate, making bills — and the utility’s revenue — less susceptible to fluctuations in weather and usage.
Critics say the plan reduces the incentive to conserve electricity because it penalizes those who don’t use much, such as senior citizens, and rewards those who use more, such as businesses. They also say it encourages people to use more electricity by lowering usage charge while raising customer charge, and that it negates CWLP’s laudable past efforts to get customers to purchase energy-efficient appliances, better insulate their homes and take other steps to use less electricity.
It’s not entirely clear how the change will affect customers’ bills. Smaller residential customers may see their monthly bills increase by 2019, when the phase-in is complete, from 30 cents to as much as several dollars.
Two weeks simply was not enough time for ratepayers and aldermen to digest the plan. It certainly did not give city leaders enough time to communicate with their constituents and explain what the effects on their monthly household budgets could be.
And there wasn’t enough time for citizens to investigate if this truly is a rate reduction or if it’s actually a considerable rate increase for customers when it’s all said and done.
At this point the rate restructuring will happen whether customers like it or not. City leaders are correct to try to address CWLP’s finances, but it appears this may be another example of kicking the can down the road, especially considering the large amounts of money the city has had to spend over time to fix and upgrade the utility’s aging coal-fired plants. Other than restructuring customers’ rates, the factors that most affect CWLP’s finances have not changed.
Certainly, this restructuring shouldn’t make anyone believe CWLP is out of the financial or regulatory woods. The issues CWLP and the City of Springfield will be forced to wrestle with in the coming decades are only going to get more complicated and expensive. Ratepayers deserve more clarity about CWLP and its challenges. That means having someone without political ties or re-election concerns represent their interests at city hall.
Mayor Langfelder and CWLP are urged to establish an oversight panel of people who understand the complicated nature of power markets and regulation; who have the time, desire and expertise to get involved; who can withstand political pressure; and who can effectively communicate between the utility and frustrated ratepayers (taxpayers) who demand transparency about the utility, its finances and its future.
Joe McMenamin for Ward 7 