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.