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MATTHES' REVENGE, PART TWO: Electric rate increase shocks homes, not businesses

Homeowners and renters prepare for a jolt; Matthes wants to buy Ameren site with "cash reserves"

COLUMBIA, Mo 8/26/14 (Beat Byte) -- After City Hall spent $40,000 for a so-called "electric utility cost of service study," Columbia city manager Mike Matthes is ignoring the report instead recommending a rate hike that will nearly double utility bills for residential customers while raising rates moderately for business and industry.  

Matthes introduced the unprecedented round of hikes -- which ignore a city utility surplus of over $144 million -- at the City Council's August 18 meeting.  

This publication introduced the electric rate proposals in part one

Nicknamed "Matthes' Revenge," the rate increases have a disproportionate impact on the low, middle, and upper-middle income consumers who have opposed most of the city manager's policy proposals since he took office in May 2011.   

"The bottom line is that residential customers will be charged $100,000 more for electric service; small general service customers will be charged $600,000 less; and industrial customers will be charged $120,000 less," retired Columbia public works superintendent Bill Weitkemper emailed local reporters and City Council members last week.  

The figures represent the annual revenue difference between rates included in a 2012 "cost of service" study and increases Matthes recommends for each customer category, Weitkemper explained in a follow-up email.   At the beginning of the present fiscal year, Columbia Water and Light serviced 40,897 residential, 5,436 small general service, 1,037 large general service and 36 industrial electric customers.  

The electric rate hikes are especially egregious, Weitkemper notes, because the city's cost of service consultant, Utility Financial Solutions of Holland, Michigan, recommended significant increases for business and industry consumers in the 2012 study:    

Residential customers:   $8.45 to $14.40
Small General Service customers:   $8.45 to $23.70
Large General Service customers:   $0 to $45.00
Industrial customers:   $0 to $325.23

But Matthes and his team "did not follow the 2012 cost of service study," Weitkemper explained.  

Instead, they want to drop the rate hikes for industrial customers from $325.23 to $45, an 86% reduction;  and small general service customers from $23.70 to $14.60, a 38% reduction.   

Meanwhile, residential customers are hit with a whopping 72% increase, regardless of usage.   Matthes has proposed no change in a proposed hike for large general service customers.  

The 2015 rate and fee increases follow dozens of similar hikes in recent years. 
 
Mayor Bob McDavid presided over a 2% electric rate increase in 2010.  Since taking office that same year, Dr. McDavid has approved rate and fee increases on virtually every city service while promoting the need for young workers, good jobs, and a low cost of living. 

The rate and fee hikes have bulged city coffers enough that city administrators have proposed buying "shovel ready" development land north of town and now, the old Ameren site in Columbia's North Village Arts District.   
 
"Matthes recommends buying the Ameren site with the city's cash reserves," the Columbia Daily Tribune reported last week


PART ONE

PART THREE

PART FOUR




You are here: Home City Hall Budgets and Finances MATTHES' REVENGE, PART TWO: Electric rate increase shocks homes, not businesses

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