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City Council votes to increase electric rates effective July 1

Columbia’s electric rates will rise July 1 after the Columbia City Council voted 5-2 in favor of implementing a rate increase Tuesday night.

Council members Nick Foster, Nick Knoth, Betsy Peters, Don Waterman and Mayor Barbara Buffaloe voted in favor of the rate increase. Council members Roy Lovelady and Andrea Waner voted against it.

The 6.9% increase is projected to bring in an additional $8.3 million annually for the city.

This marks the first time the city has increased electric bills since fiscal year 2019, according to previous Missourian reporting.

Like the previous rate structure, the new model charges more for utility customers who use more electricity — though the rate increase is not as severe at higher levels of usage.

Columbia Director of Utilities David Sorrell told the council that the decision to propose a rate increase stemmed from a number of factors, like inflation and changes in energy pricing.

In a presentation before the council’s vote, utilities department staff members said the new rates ensure financial stability to support long-term, reliable infrastructure, and that the plan allocates the utility’s costs to customers as fairly as possible based on their energy usage patterns.

“Over the course of a year, everyone will pay more under this proposal than they did the year before if their energy use is the same,” Sorrell said.

Buffaloe asked why the new rate would take effect July 1 instead of a typical October change date. Sorrell said that waiting until October would only allow the city to increase its revenue by $7.8 million, versus the $8.3 million windfall that will come from the earlier start.

“Every month we wait, it really needs to be a little bit larger of an increase,” Sorrell said.

Residents who addressed the council were divided over how to proceed.

Carolyn Amparan, who spoke on behalf of a local Sierra Club group, asked the council to postpone a decision to “meet all our goals, not just the financial ones.”

“You’ve been told that this rate structure is following industry best practices,” she said. “However, these best practices are based on old paradigms, paradigms that don’t consider social equity, climate justice, or the impact of higher temperatures now and in the future."

Dave Switzer, who chairs the city’s Water and Light Advisory Board but said he was speaking on his own behalf, asked the council to approve the increase.

“I want you to understand that further delay would not only have dire implications for the financials of the electric utility, but also impact the water utility,” he said. “I urge you to avoid the impulse that plagued previous councils to delay hard decisions for far too long to the detriment of the utility and the customers.”

During public comments regarding the proposal, Mike Martin, who said he works in the rental housing industry, expressed concerns about the philosophy behind an increase.

“Why am I hearing what I need to be doing about affordable housing when not one government agency in this town that fires this rhetoric is modeling how to make things affordable?” he asked the council.

Prime LLC proposed the new rate structure and presented it to the council for the first time in early March.

The increase will bill electric rates in a way that recovers the cost of providing service to each class of customer and to prevent some customer classes from subsidizing others.

Under the current rate structure, which will no longer apply beginning July 1, industrial users pay 22.7% more in collective electric bills per year than it costs to give power to them, according to Prime LLC’s report. Alternatively, residential customers with gas heating pay 1.8% less than the cost of service, according to the report.

Prime LLC proposed an overall 10.4% increase in residential customers’ gas heating bills, which is the highest of any rate class. This doesn’t apply to those who have dusk to dawn lighting.

Households with electric heat will have their total billings rise by 9.8

Before voting, Buffaloe said she wished she had more information from the proposal, specifically on the city's cash reserves and where the new funding is exactly going.

Lovelady, who was one of two council members to vote against the measure, called the vote a lose-lose scenario.

Foster, who backed the increase, said the debate could have been avoided if smaller rate increases had been implemented each year.

“I don’t believe in wishful thinking, but I sure do wish we weren’t here tonight,” Foster said. “I’ve been in meetings where my head hurt, not anything more than this."