Hannibal residents will see their electric (3 percent), water (4 percent) and sewer (4 percent) rates go up on July 1.
Hannibal residents will see their electric (3 percent), water (4 percent) and sewer (4 percent) rates go up on July 1. The Board of Public Works Board approved the increases during a special meeting on Thursday afternoon, following a public hearing during which no one spoke in regard to the proposals.
The electric increase will impact each rate class, including the Parks & Recreation Department, Convention & Visitors Bureau, Molly Brown House and Hannibal Free Public Library which do not receive free power.
Within each rate class, both the customer or meter charge as well as the usage charge will be increased by approximately 3 percent. Consequently, residents inside the city will see their customer charge go up from $12.50 to $13 per month. Those outside the city limits served by the BPW will see their customer charge increase from $16 to $16.50.
According to the BPW, the average residential bill is around $97. After the rate increase the average bill will climb to about $100.
As for the 4 percent increase in water and sewer, it will be passed along to customers in all rate classes. The projected monthly impact to the average residential bill will be $1.20 for both water and sewer.
It will be the second consecutive year that electric rates have been increased. After two consecutive years without a power rate hike, in 2012 residential customers alone saw a rate hike of 3 percent.
Last year’s increases were larger for water (10 percent) and sewer (8 percent), and included all rate classes.
City water rates have been on the rise in recent years. Prior to 2011’s 8 percent hike, water rates went up 3 percent for all classes of users on July 1, 2010. A 5 percent water hike took effect in 2009. The cost of sewer service went up 8 percent in 2011. On July 1, 2010, sewer rates increased 3 percent, which followed a 15 percent jump in 2009.
A major reason behind the electric rate increase is the BPW’s continuing payments as a partial owner of the Prairie State coal-fired power plant in Illinois.
“We believe that next year will be the most challenging year to meet our Prairie State obligations,” wrote Bob Stevenson, general manager of the BPW, in a recent memo to the City Council.
The BPW is making $600,000 a month payments for its share of Prairie State. And while the sale of power generated at the plant has begun to lessen the monthly bill, it’s still not a break-even proposition for the city.
The water and sewer rate hikes are needed to help pay for required improvements to those systems.
“We are planning to spend slightly over $2 million on capital improvements. Half of that will be required to comply with EPA mandates,” wrote Stevenson, adding that even with the 4 percent increase for water the BPW will still need to borrow about $1.7 million to finance its capital needs.
As for the Sewer Department, just over $2 million will be spent on capital projects next fiscal year. Of that amount, $800, 000 is required to meet government requirements, according to Stevenson. Despite the 4 percent increase for sewer the BPW will still need to borrow about $1.8 million to pay for the projects.