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Nixa approves energy cost adjustment; council hears drivers of higher wholesale power costs
Summary
Council approved an electric energy cost adjustment after staff reported higher wholesale costs from natural gas, a $70,000/month transmission tariff increase and a 19% rise on the city's hydro allocation. Staff estimated the average residential customer's bill would rise roughly $3.60 per month.
The Nixa City Council approved a resolution March 10 to apply an electric energy cost adjustment (ECA) that will true up rates to the city's wholesale power costs for the prior year.
The city's director of utilities and public works explained that higher wholesale costs driven by rising natural gas prices, a transmission tariff hike that staff described as about $70,000 per month, and a 19% increase on the city's 5.3-megawatt hydro allocation (estimated by staff at about $12,000 per month) have necessitated an upward adjustment. The presenter described the ECA process as a statutory true-up adopted under the city's rate structure: "So for this this year, we are proposing an increase to our our our positive ECA in the amount of 0.0609¢ per kilowatt hour," the director said during the presentation. Later in the same presentation staff provided a different figure for the billed adjustment and an example calculation: "Adding this year's proposed ECA 0.036 provides an increase of $3.60 to the bill, taking their total bill from 127 to $130.50," staff stated, using an illustrative 1,000-kilowatt-hour household.
Staff told the council the ECA applies from April 1 through May 30, 2027, and that a new rate study budgeted for the year will examine whether to keep the ECA as an annual true-up or shift to quarterly or monthly adjustments. The director said the purpose of the ECA is to keep base rates lower and use a true-up to recover deviations in wholesale costs rather than build those costs into baseline rates.
A council member asked whether the city should review the ECA more frequently. Staff said the upcoming rate study will evaluate options, including monthly or quarterly true-ups.
The council moved, seconded and adopted the resolution by voice vote. Staff said the ECA as adopted will be charged for the stated period and staff will implement the billing change as described.
Note on figures: the transcript contains two different numeric descriptions of the adjustment (one instance of "0.0609¢ per kilowatt hour" and a later instance labeled "0.036" with staff calculating a $3.60 increase on a 1,000-kWh bill). The article presents both as they appear in meeting remarks and uses staff's example ($3.60) as the operational, per-household illustration recorded in the meeting.
