Kirkwood adopts average 14.8% electric rate increase effective Nov. 1 to rebuild depleted reserves

The Kirkwood City Council on Oct. 16 adopted an amendment to the city's electric-department fee schedule that increases rates on average 14.8% effective Nov. 1. Council members, city staff and a retained consultant (UFS) described a multiyear shortfall in the electric fund driven by capital spending for system upgrades, energy-market volatility that increased purchased-energy costs, and accounting/ tracking issues that caused deficits to surface only after year-end reconciliations.

City staff and the consultant told the council the electric enterprise used a mix of financing and cash reserves to fund a long-range infrastructure program (upgrading transformers and substations and increasing system capacity), and the combination of higher-than-expected construction and energy costs created a 'shortfall. Staff reported past-year impacts including a roughly $4 million draw on electric cash reserves and an approximately $9.3 million draw from general-fund reserves that had been used to support capital activity in the electric utility. The city has engaged UFS to audit and assist with corrective financial controls, including implementing a pass-through or fuel/capacity adjustment (PCA) on a rolling basis to dampen future market volatility.

The council debate included questions about the size and timing of the recovery, an audit of the last two years of electric-department spending, and plans to rebuild reserves. Staff projected the electric fund would still be negative at the end of the current fiscal year absent corrective action (staff cited a year-end shortfall on the order of $1.3 million under current assumptions) and estimated a multi-year recovery plan that could take roughly five years to fully rebuild targeted reserves.

Under the adopted fee schedule, residential customers' monthly base service charge will increase (from $8.03 per month to $10.00 per month for residential service), and volumetric energy charges and an overall average 14.8% increase will apply across customer classes. Staff estimated the average residential bill increase would be approximately $15 per month for a household at moderate usage levels; council members noted actual household impact will vary with consumption. The change was approved by roll call and is effective Nov. 1.

Provenance: Staff and consultant overview and council discussion began at 00:59:14; roll-call adoption occurred at 01:21:22.