Dear Valued Citizens and Customers;
Residents have expressed frustrations of higher than normal charges reflected on their utility bills. In response to many citizen inquiries, the City of Lebanon would like to take this opportunity to explain charges on the most recent utility billing cycle.
While extreme weather conditions can play a significant role in higher utility costs, there are two identifiable factors causing an increase to Lebanon’s utility rates. Public Water Supply District #3 (PWSD#3) litigation expenses and increased water & electric rates are the most recognizable factors. Please read further for more details.
PWSD#3 Litigation Expenses
Initially, the City’s Water Reserve Fund was used to pay for expenses associated with the on-going PWSD#3 lawsuit. However, litigation has continued on much longer than originally expected and the Water Reserve Fund is now depleted. To keep up with the incurring expenses of this lawsuit, City Council voted on December 14, 2009 to place temporary flat monthly fees upon each of the City’s meter classifications.
As part of City ordinance #4681, the fee will be reviewed annually by City Council who intends to remove it from all utility billings once the litigation expenses have been recovered. The temporary fee is anticipated to be in-place for a minimum of 24 months.
Increased Water & Electric Rates
Over a three year period, Sho-Me Power (Lebanon’s current electric power provider) raised Lebanon’s wholesale energy costs by 77.9%. The first rate increase from Sho-Me Power came in April 2006. Cutbacks to Lebanon’s Electric Operating Fund absorbed the initial increase safeguarding its citizens from a rate hike. However, this action could not offset Sho-Me Power’s substantial rate increases that soon followed. In February 2008, City Council voted (Ordinance #4542) to increase electric rates by 12% which took effect April 2008.
Sho-Me Power began extending the additional rate increases in April 2008. As a buffer, Lebanon expended nearly $5.5 million from the Electric Reserve Fund during the interim to minimize expenses while decisions were being made concerning future electric rates. On February 23, 2009 the City Council voted (Ordinance #4615) to pass along smaller incremental electric rate increases to its citizens. The increases were implemented in this manner; a 16% increase took effect April 2009 and another 16% on January 2010.
Lebanon’s customer rates are now more in line with the true cost to provide electric services than it has been the past several years. Realizing the need to revisit rates of all city utilities, Lebanon’s City Council voted (Ordinance #4614) to increase water rates as well. The raise in water rates were also implemented in increments; starting with a 20% rate increase in April 2009 and a 15% rate increase in January 2010.
CITY EFFORTS
Efforts are being taken to re-stabilize the burden of cost on electric power. Lebanon is taking action by changing wholesale electric providers. As of April 1, 2010, the longtime relationship with Sho-Me Power will end as the City of Lebanon enters into a new agreement with Missouri Public Energy Pool (MoPEP). An electric power pool made up of 35 member cities throughout Missouri, MoPEP owns generation resources as well as long term power purchase contracts. This allows MoPEP members to have more control over future electric rates.
As part of the MoPEP agreement, a consultant will conduct a ‘Cost to Serve’ study for the City of Lebanon. This study will identify rate adjustments that will best align with the true cost to provide power for each classification. By joining MoPEP, Lebanon is confident electric rates will stabilize while the City continues to provide a reliable source for electric power.
OPTIONS TO LEBANON CUSTOMERS
The City of Lebanon understands the level of discontent its citizens are currently experiencing. Unfortunately, rate increases are inevitable and must be implemented even during these difficult economic times. However, Lebanon’s commitment to its citizens remains the same; to provide quality services and reliable utilities at the most competitive rates possible.
The City would like to remind its citizens of Lebanon’s Level Pay Program. This program establishes a monthly use charge based on account history over the past 12 months. Monthly payment amounts will be the same throughout the year; a great way to manage household budgets. To participate, accounts must be of non-delinquent status. Call (417)532-2156 to sign up for this program.
Lebanon also provides other programs to assist citizens in cutting energy costs. Currently available is the Programmable Thermostat, the Home Energy Audit, and the Preseason Heating & Cooling Tune-up Rebates. Pamphlets explaining each program in detail are available at Lebanon’s City Hall and Public Works Buildings.
Best Regards;
Henry Luxem; City Administrator
Richard Shockley; Public Works Director
City of Lebanon, Missouri
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For up-to-date City news go to; www.LEBANONMISSOURI.org
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