Item Coversheet
City of Independence
BILL NO. 18-809Res.No:          6386

Agenda Title:

18-809 - A resolution directing the City Manager to implement a 2% reduction for all electric utility customer classes and to formulate additional recommendations related to the electric utility. [Requested by Councilmember Huff.]

Executive Summary:

In 2018, the City engaged Burns and McDonnell to conduct a new Electric Cost of Service and Rate Design Report. This report is nearing completion, with preliminary findings expected by the end of 2018.


If approved, this item would result in a 2% rate decrease for all customer classes of Independence Power & Light.  The item would further direct presentation of the preliminary findings of the 2018 report by December 10, 2018.


As part of Independence for All, City staff have been working over the past two years to identify operating efficiencies and other innovations within Independence Power & Light that will ensure the financial sustainability of the electric utility while also promoting growth through a more competitive rate design.  The City is also in the process of conducting an Electric Cost of Service and Rate Design Report through a contract with Burns and McDonnell. 


In anticipation of the findings of this 2018 rate design report, this resolution seeks to implement a rate reduction for all customers of Independence Power & Light.  At full implementation, the recommended proposed restructured schedule of rates would reduce IPL revenues by approximately $3 million per year (2%) and would impact the revenue from each rate class.  The effects of this revenue reduction are offset, however, by the elimination of over 30 vacant positions over the past 2 years.  It should be noted that the General Fund, which receives a Payment in Lieu of Taxes (PILOT) of 9.08% from each utility bill, would see an annual reduction of approximately $272,000 as a result of the revised rate schedule.


Finally, this item would direct the City Manager to bring forward to the preliminary recommendations of the 2018 Burns & McDonnell study by December 10, 2018.

Department:          City Clerk's OfficeContact Person:          Sarah Carnes-Lemp

City Managers OfficeApproved
Finance DepartmentApproved
Law DepartmentApproved
City Managers OfficeApproved
City Clerk DepartmentApproved

Council Action:          Council Action:          Accepted

2015 Sawvel StudyOrdinance