Kimball residents to see 13 percent electric rate increase

Kimball residents will soon see an increase in electric rates.

The Kimball Board of Public Works unanimously passed a 13 percent hike in electric rates at its meeting last Thursday. The rate increase will go into effect April 1.

Daniel Ortiz, city administrator, said the changes were necessary due to the Municipal Energy Agency of Nebraska (MEAN) restructuring its rate system. The system has been unchanged in over a decade.

“Much has changed with the wholesale electricity market and regulations at the federal level have altered how wholesale electricity suppliers operate across regions and regulatory entities,” Ortiz said in an email to the Observer. “The attack on coal-fired power plants, mandates for more renewable energy such as wind and solar, and the restrictions that limited wholesale electricity suppliers to supply electricity across the country have deeply impacted how MEAN operates today.”

One change to the bill implemented by MEAN is a “fixed cost recovery charge” added to each bill. Ortiz said the charge is meant to help MEAN stabilize and better “weather the wholesale electric market.”

Ortiz said that while some may call for Kimball to leave MEAN, that is not possible due to a long-term contract with the entity.

“Kimball is under a long term contract with MEAN. Other suppliers will want a similar long term contract or else sell power at a higher price if only for a short term period,” he said. “The days of small power plants supplying communities have been replaced by large wholesale power suppliers, who own large nuclear, natural gas or coal-fired power plants that supply entire multi-state regions, not just one or two communities.

“Some have suggested that the city utilize its power plant to provide electricity to the community. Unfortunately, the power plant and its six diesel/natural gas engines would cost an estimated over $7 million just in fuel alone, double or tripling that cost to provide electricity. The power plant still remains an asset that generates electricity when the city’s power is cut off or when MEAN calls on Kimball to generate electricity to be placed on the electrical grid and compensates Kimball for it.”

In numbers provided by the city, the average residential customer spent $126.18 on their electric bill for the first 21 days in January. With the 13 percent increase, the average will rise to $142.58.

According to those same numbers, the vast majority of residential customers, 852 of 1,146, spent $200 or less during that time period on their electric bill.

The current minimum electric charge for residential service in Kimball is $18.02 per month, and that will increase to $20.36. The summer rates will be set at 13.18 cents per kilowatt-hour. The winter rates will be 11.38 cents for each of the first 570 kilowatt-hours and 9.89 cents per kilowatt-hours thereafter.

Rural residential service will have a minimum charge of $22.76 per month. Summer rates are 13.18 cents per kWh, while winter rates are 11.38 cents for each of the first 570 kWh and 9.89 cents for each kWh thereafter.

For general service inside city limits, the minimum monthly bill will be $38.33. The summer kWh charge is 12.81 cents, while the winter kWh charge is 12.58 cents for each of the first 2,200 kWh and 10.54 cents for each kWh thereafter.

For rural general service, outside the Kimball city limits, the minimum charge will be $44.92 per month. The summer kWh charge is 12.81 cents, while the winter charge is 12.58 cents for each of the first 2,200 kWh and 10.54 cents for each kWh thereafter.

Other minimum charges include $17.37 per month for a street light, $335.38 for general service demand and general service demand rural, and $167.69 for irrigation service. Additional fees apply based on usage.

The board also received a lengthy update on the city’s power plant from plant manager Lance Terrill and Larry Wheeler of Ohio. Wheeler, who has 40 years experience in municipal power, was in town to help with various projects on the power plant.

Wheeler oversaw the installation of a fuel injector in one of the power plant’s engines, and oversaw various training efforts for city personnel.

Terrill said the power plant could run and generate power in its current state. Wheeler said the engines were in “pretty good” shape after looking at each engine’s oil analysis.

Wheeler also suggested an annual inspection evaluation of the plant.

The public works board will meet jointly with the city council on March 19.

The board also:

- Approved a rate study to be done as a whole. This will include finance policies, current rates and more. Previous rate studies included just electric rates.

- Sought more information on a potential bulk water agreement with ITSI.

- Heard Ortiz report that the south substation project will start next month. He hopes it will be complete in one day, but said it might take more than 24 hours to complete.

- Heard Ortiz report that some customers are abusing the city’s payment plan policy, and said some changes could be coming. He added that the city will be looking at online bill pay and average billing.