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How To Soften The Sticker Shock: Kahoka Council Considers Stepped Electric Rate Increase

By Mike Scott

With more than 14 months remaining in its current contract with Ameren UE, the City of Kahoka is looking for ways to reduce the impact of higher energy costs to its customers.  The  discussion of the issue highlighted Monday night’s Kahoka Board of Aldermen meeting
The current wholesale contract with Ameren  expires at the end of 2008, and although the city has a long-term investment in the Prairie State Energy  Campus which will provide electricity at a fixed rate, that project, which recently broke ground for construction, will not be in service until 2012.
“Looking at the market rates now, our cheapest rate is about 4.6 cents per kilowatt,” said Jim Sherwood.  Current market rates are around seven cents per kilowatt, an increase of over 40 percent.
“We have not raised electric rates since the early 1980’s,” said Alderman Curtis Mack.  “And we cannot generate our own electricity for that rate.”
The city’s ability to generate power has been a factor in previous contracts, allowing the city to bargain for a better rate.  The council hopes it will continue to be a benefit as contract discussion go forward.
“Electricity used to be our cash cow,” said Alderman Jeff Wood.  “Now it’s just breaking even.  We have paid for a lot of city services with electric money.”  Some city service may be threatened if rates are not increased.
The council is considering an increase in the near future to help build up cash reserves before  the current contract expires, which may allow for a lesser rate increase at that time.
“If we wait until the end of the contract to do anything, we could be hit with a 52% increase or higher,”said City Attorney Rick Roberts.
“An increase is going to hit everyone’s pocket,” added Wood.  “But it is something you have some control of.  If we have to raise property taxes to pay for city services, you won’t have any control of how much you pay.”
The council has scheduled a public hearing for Monday, October 22, at 7:00PM, after which it will meet to take action on a rate increase.
In other business, the council:
–Discussed the cost of the wall constructed on the side of Kathy Shipley’s building on the north side of the square.  The wall’s cost exceeded what the council had approved.  That bill was left unpaid until the city could resolve the difference.
–Approved a request from Vigen Memorial Home to install a handrail.
–Proclaimed Trick or Treat night to be Tuesday, October 30, from 5-7PM.
–Approved an ordinance accepting $4046.50 as settlement from Verizon Wireless for taxes.
–Approved the hiring of David Cannon as a full time police officer.  Chief Bill Conger also reported 123 calls for service in September, including one illegal immigration arrest.
–Established a charge of $25 per hour per person (2 hour minimum) for after hours service calls such as water and sewer connections.
–Approved Kahoka State Bank’s bid for the Cemetery Trust Fund CD deposit.
–Tree committee chair Chis Lentz reported the city received a $10,000 grant for tree removal.
–Approved the purchase of a used copy machine and supplies for a sewer line extension on West Main.
–Voted again to immediately disconnect Interlink internet service for breach of contract.  A company representative did not show up for the meeting as scheduled.
–Mayor Pro Tem Jerry Webber commended the  Sesquicentennial Committee for their work.