Item Coversheet
City of Independence
AGENDA ITEM COVER SHEET
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.

Background:

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


REVIEWERS:
DepartmentAction
City Managers OfficeApproved
Finance DepartmentApproved
Law DepartmentApproved
City Managers OfficeApproved
City Clerk DepartmentApproved

Council Action:          Council Action:          Accepted

ATTACHMENTS:
DescriptionType
2015 Sawvel StudyOrdinance
ResolutionOrdinance