By Mari Radtke
Evan Leebens, Rate Analyst II for Missouri River Energy Services attended the Primghar City Council meeting on Wednesday April 14 to explain the results of the rate study, an somewhat regular undertaking by the electricity provider.
Leebens explained the how the rate study used an analysis of Primghar’s historical power usage. The results show that Primghar’s use has been pretty consistent since 2012.
The City of Primghar is under contract to purchase a fixed amount of power from WAPA. MRES provides the additional power required. Looking into 2025, the rate study looked at probable electric power demand. It anticipates a slight demand growth and estimates what percentage will be purchased from WAPA.
Leebens also explained the different classes of users and their percentage of Primghar use, residential, commercial single-phase, commercial three-phase, government and street lighting.
Leebens began a discussion of the financial position and projections for the Primghar electric utility. He doesn’t expect rate changes, but he does anticipate charge adjustments to the different classes of users. Current revenue for the municipal utility is at $875,000 with an expected revenue increase to $960,000 in 2025. It appears that the reserves will continue to increase and offset future capital expenditures. He also reminded the council of 2 refunds coming to the municipal utility: the power supply refund from MRES in December 2020 of $22,076. A second settlement from FERC in which a lawsuit proved that the transmission charges were excessive and is due summer 2021, comes in at $42,021 for Primghar.
The base charge is dedicated to pay for labor for the utility. That charge is expected to increase slightly with the cost of power not expected to rise through 2025 if water conditions (for power production) remain normal. Leebens said that the current water is at about 85% of normal, but WAPA is not foreseeing rate increases.
A brief discussion about incentives for time of day use was had. Midday, mid summer use is a high demand time. Finding ways to increase demand in the middle of the night can bring down costs significantly.
Currently, the capital expenditure plan in Primghar includes GIS mapping which is underway. Other capital expenditure plans include a new trailer and a fence around the electric yard. Routine projects are the street light transition to LED, converting to underground distribution (power lines) and replacement of transformers and poles. Council has been discussion each of the routine projects at meetings.
The rate study showed how Primghar’s historical cash reserves have consistently been above the suggested minimum.
Leebens summarizes his presentation and anticipates 1) Approval no overall rate increase with minor Cost of Service adjustments; 2) Increase customer charges in all classes 3) Maintain the seasonal energy rate in the Residential Class and 4) Continue to Monitor Reserves to Maintain Strong Financial Position.