Utilities commission reports higher purchased-power and gas costs, taps stabilization fund

The Hutchinson Utilities Commission on Wednesday reviewed January financial statements showing a sharp increase in purchased-power and gas costs that prompted a power cost adjustment and use of reserves.

Jared, a utility finance staff member, told the commission the average cost of power the utility purchased in January was $86.90 per unit, compared with about $37.35 a year earlier, and that a power cost adjustment produced roughly $159,000 in additional revenue this month. He said gas purchase volumes and prices also rose, with about 75.3% of gas used coming from fixed contracts and roughly 24.7% procured on the spot market during the cold stretch.

The higher market prices and prolonged elevated gas pricing from Jan. 22–31 led staff to draw $415,000 from the rate stabilization fund, Jared said. Staff also applied a fuel cost adjustment that passed through approximately $524,000 to customers; the remainder of the increased costs was recovered through normal retail rates, according to his presentation.

Why it matters: Commissioners were told average residential impacts vary by usage. Jared said lower-usage customers typically saw bill increases in the $45–$55 range; average customers faced roughly $65–$75 increases; and very high-usage residences experienced larger changes, up to about $240. Commissioners flagged the need to replenish the stabilization fund over time so margins and cash balances return to targeted levels.

Commission action: Tom moved and Matt seconded approval of the financial statements; the motion carried on a voice vote with no opposition.

Outlook and next steps: Staff said they will monitor market prices and continue the rate-study work under way this year. Auditors are expected to be on site next month, and rate-study results are anticipated later in the summer to inform any rate changes next fall.