Vermillion City Council approves plan to serve newly annexed property with electric utilities

The Vermillion City Council convened on August 5, 2025, to discuss significant developments regarding the city's electric utility services, particularly in relation to recently annexed properties. The council is moving forward with plans to provide electrical services to newly annexed areas, a decision that underscores the city's commitment to serving its residents with reliable and affordable power.

The light and power department, which operates as a public, not-for-profit utility, is owned by the community and is accountable to its residents. The council's authorization aims to notify Clay Union Electric of the city's intent to serve the annexed property, ensuring that the city can provide electrical services without delay. According to state law, the city must notify the electric cooperative within one year of annexation; otherwise, the cooperative retains service rights indefinitely. The city has a history of serving all annexed areas since 1992, and there are currently no Clay Union customers in the newly annexed area.

City officials emphasized the importance of this decision, noting that it not only allows for the provision of electrical services but also includes plans to compensate Clay Union Electric for any lost revenue due to the transition. This compensation will be paid for up to seven years, reflecting the city's commitment to a smooth transition for all parties involved.

During the meeting, concerns were raised by Chris Larson, the general manager of Clay Union Electric, who expressed reservations about the motivations behind the annexation. He questioned whether the primary purpose was to facilitate development in adjacent areas rather than to serve the community's needs. Despite these concerns, the council moved forward with the proposal, highlighting the benefits of municipal utilities, including transparency, community support, and lower costs for residents.

The council also discussed the broader implications of the municipal electric utility, noting that it contributes nearly a million dollars annually to support the city's general operations. This financial support is crucial for maintaining various city services and infrastructure, reinforcing the value of having a locally governed utility.

As the city prepares to implement these changes, residents can expect continued engagement and updates on the progress of electrical services in the newly annexed areas. The council's actions reflect a commitment to enhancing community services and ensuring that Vermillion remains a reliable and affordable place for its residents.