City Water Light and Power has outlined what it says should happen to keep it out of technical default — and yes, it means you’ll pay more.
The city-owned utility propses increasing the fixed customer rate by $12 for residential customers, $5 for seniors.
Businesses would also see hikes depending on their size. Smaller businesses under rates 40, 41, 42 and 44 would also see a $12 hike. Rates 46 and 47, medium customers, would see a $70 customer rate increase and large customers under rates 48 and 58 would see a $200 monthly increase.
Chief Utilities Engineer Eric Hobbie says power prices took a nose dive in 2008 and haven’t recovered — wholesale revenues are down significantly. He took exception to some aldermen who questioned why CWLP is still in the power generation business when it’s not CURRENTLY lucrative.
“We can either buy on the market, or we can continue to supply ourselves. You can’t have both,” Hobbie told the city council. “You can’t supply the market when power prices are cheap and then suddenly sell off your generators and buy from the market, then turn around and buy them back a few years later. That option is not available to anyone.”
The utility also proposes keeping money it would ordinarily transfer to the city’s coffers — but it would impose a 2.67 percent municipal tax that it would pass to the city. Everyone in Springfield would be obligated to pay it if passed by ordinance, even non CWLP customers.
CWLP transfers about $5.8 million annually from its Payment in Lieu of Taxes (PILOT) fund.
Also under the plan, starting March 1, electricity rates would drop by 4 percent.
Aldermen discussed the idea for more than an hour, but no ordinance is yet proposed.
The other downside — Hobbie says this plan falls nearly $2 million short of revenue goals — so they’ll have to either find more cuts or hope for a good winter.