The Joplin Globe, Joplin, MO

May 7, 2012

Carthage utility proposes rate increase

By Wally Kennedy

CARTHAGE, Mo. — A proposed 11.3 percent rate hike for household customers of the Carthage Water & Electric Plant will go before the Carthage City Council during its meeting tonight.

The hike, recommended by the utility’s board of directors, would increase the average household customer bill for electricity, water and wastewater to $149.41 from $134.30, an increase of $15.11 per month.

The average residential customer uses 1,100 kilowatt-hours of electricity and 700 cubic feet of water.

The average commercial bill would increase from $714.42 to $795.88, an increase of $81.46 per month, or 11.4 percent. The average industrial bill would increase by 10.7 percent.

Bob Williams, CEO of the city-owned utility, said the proposed increase will get a first reading today by the council and a second reading in two weeks.

“The biggest issue is the increasing cost of purchasing power,” he said. “We are expecting a very significant increase in the cost of coal itself and in the cost of transporting that coal.”

Williams said the utility has its largest contract for purchased power with a plant at Sikeston. Contracts for coal and the transportation costs associated with it are 12 years old. They are coming up for renewal.

Williams said 75 percent of the overall cost of coal stems from the cost of the diesel fuel needed to transport it by train.

The Sikeston plant recently reopened after being shut down for two months. The plant is getting a major upgrade to comply with new Environmental Protection Agency emission standards for sulfur dioxide, mercury and nitrous oxide that will take effect in 2014.

“That’s $24 million that will be spent on upgrades to meet those EPA requirements, and they are not finished yet,” Williams said. “That will further raise demand costs. Every aspect of cost has gone up.”

Williams said rate-comparison tables show that the city utility provides electricity at a rate that is about 30 to 35 percent lower than that of other utilities operating in the region. If the proposed rate increase takes effect, the utility’s electricity rate would be about 17 percent lower than that of other utilities in the region.

“We have been able to hold the line up to this point, but these regulatory requirements that have been thrust upon us, the additional cost for coal and rising fuel prices have forced us to do something,” he said.

Last time around

THE CARTHAGE UTILITY’S last rate increase was in 2006. The council will meet at 7:30 p.m. today at City Hall.