City Water Light and Power is on its way to another technical default due in part to an unusually cool summer — it’s leaving the utility scrambling to figure out what’s next.
Chief Utilities Engineer Eric Hobbie says hiking the monthly, fixed, customer charge of $5.76 is likely a better option than seeking a rate increase.
“The fixed cost of operating continues to go up, and that’s the only fixed component of a bill,” said Hobbie. “If you take a $100 bill, we only get a little over $5 in guaranteed revenue, so it’s about five percent of the bill.”
Some aldermen also wanted to broaden the customer base — perhaps soliciting surrounding communities. But Hobbie warns that CWLP is in tense litigation with Ameren to turn over electric customers within the city of Springfield.
CWLP’s electric fund must maintain a certain cash level to cover 125 percent of its debt payments — debt plus an extra 25 percent. Right now the electric fund can’t cover the debt.
It’s in worse shape than the last time the utility defaulted in Fiscal Year 2012.