Town staff link high winter electric bills to extreme cold; consultant recommends 2% rate increase for FY26

Town staff and the town’s rate consultant briefed the Clayton Town Council May 5 on unusually high winter electric bills and on a proposed electric‑rate plan for fiscal year 2026.

Anne Gaines (title recorded as a staff presenter) told council January 2025 was the second‑coldest January in more than three decades and noted the town logged roughly 38–44 billing days across cycles with temperatures below 32degrees. She said that cold snap drove use of heat‑pump auxiliary heat (heat strips), which consume roughly three to four times the kilowatt hours for the same heat output compared with heat pump operation in milder temperatures. Staff data showed January‑to‑February consumption increases of about 20–23 percent year‑over‑year across billing cycles.

Gaines outlined customer‑facing strategies the town is pursuing, including an electric bill redesign with clearer graphics, a public campaign for voluntary energy audits, a self‑service online energy audit tool and targeted outreach about heat‑pump operation and conservation steps.

Craig Brown of 1898 & Co. (the consulting division of Burns & McDonnell) presented the town’s FY26 electric rate study and financial forecast. Brown said Clayton continues to experience residential customer growth (3–5% projected, with a recent jump to 8% because of large developments). He noted a new water treatment plant scheduled to come online in January 2026 is expected to be the town’s largest electric customer and will include on‑site backup generation; that generation could be used for "peak shaving" to reduce charges tied to the town’s peak demand.

Brown recommended a 2% rate increase for FY26 to meet revenue requirements while preserving cash reserves and debt‑coverage targets. He said the recommendation reflects power‑supply cost pressures from the town’s wholesale power supplier (Nekampa/Nakempa referenced in the presentation), expanded capital projects and continued customer growth. Under the recommended 2% increase, a typical residential bill at ~900 kWh per month would rise about $2.79 per month (from $142.05 to $144.84).

Brown said the FY26 plan uses debt financing for several large capital projects and that the study retains modest annual increases (he outlined a 3% forecast in subsequent years) to avoid larger, more disruptive single‑year increases.

No council vote on rates was recorded at the meeting; Brown’s recommendation and staff materials will inform the FY26 budget process and any future rate ordinance action.