Hannibal BPW defends proposed 11.2% electric rate increase as move to rebuild reserves after surge in purchased power costs

Hannibal City Board of Public Works officials told the City Council on June 27 that the board-approved fiscal year 2026 budget includes an 11.2% electric rate adjustment — scheduled to take effect Oct. 1, 2025 — to replenish reserves depleted by higher purchased-power costs and to comply with a board-approved cash-reserve policy.

At a special council meeting in City Hall Council Chambers, Paul, a Board of Public Works staff member, said "the primary reason for the rate increase this coming October isn't for next year's budget. It's primarily for replenishment of what's been lost from prior year's budgets." He said the electric fund has paid significantly more for capacity than in prior years and the board is seeking to restore reserves.

Why it matters: BPW officials said the utility's cash reserves fell from about $17.18 million to roughly $7.5 million over several years as the board covered higher purchased-power costs. Paul told the council the board expects to add roughly $3 million of new revenue next year to meet the board's cash-reserve target and to address a rate covenant the utility has failed to meet in the past two years. City council members…