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Hannibal Courier - Post - Hannibal, MO
  • BPW: Rate hikes will cost about $8.50 more per month

  • As expected, the Hannibal Board of Public Works Board approved a preliminary budget last week that includes rate increases for electricity, water and sewer.
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  • As expected, the Hannibal Board of Public Works Board approved a preliminary budget last week that includes rate increases for electricity, water and sewer.
    Electric and water rates will increase by 5 percent, while sewer costs will climb by 5.5 percent.
    But what will this mean to the average residential customer? According to figures provided by the BPW, electric rates will go up by approximately $5 a month. It is estimated that water and sewer rates will increase on average by $1.72.
    The total monthly difference will amount to $8.44 a month, according to the BPW.
    In an e-mail to the Courier-Post, General Manager Bob Stevenson noted that the split between increases to customer charges and increases to usage charges have not been determined yet for next year.
    “I tend to favor higher customer charges and lower usage charges. Customer charges are designed to pay for our fixed costs which includes pipe repairs, a very large component of our expenses. Pipes must be repaired whether we sell commodities or not,” he said.
    A minimum sewer rate increase of 4.5 percent was required so that the bonds sold to raise money for needed sewer system improvements could receive a high rating.
    According to the BPW, had water and electric rates not been increased, and assuming flat sales, the Electric Department would have lost an estimated $1 million while the Water Department would have wound up in the red by approximately $360,000.
    In a memo to the BPW Board, Stevenson wrote that, despite the rate increase, some work to the electric system won’t be done in the upcoming year.
    “The electric operating budget is pretty austere compared to our goals for the department,” he said. “We are maintaining our system in a status quo situation and deferring some improvements we have been planning for some time.”
    Stevenson observed that the “honest realty” is the electric rate increase is due to Prairie State, the coal-fired power plant in which the city owns a share.
    “The Prairie State Energy Campus continues to underperform and we have lowered our revenue projections to what we believe will be closer to reality,” he said.
    As for the water and sewer rate increases, they are being driven in large part by capital spending related to EPA compliance issues.
    “We are meeting our compliance goals while holding rate increases to as low a level as possible,” said Stevenson.
    A public hearing and a final vote on the budget, including  the rate hikes, will take place in June.

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