NIXA, MO.- Nixa Utilities will likely increase rates on customers after reserves decrease. According to the utility, an average residential customer will see a 5% bump at the start of 2019 when the utility changes its billing formula.
Doug Colvin is the Director of Nixa Utilities and says the city council has tried to prevent rate increases over the last decade as energy costs have risen. “We’ve essentially been giving a discount as if power was cheaper than it actually is.” The city says with reserves running low, it can no longer afford to give the same discount.
According to a release from the city, creating a fair electric rate formula is complex. Here’s how it’s explained:
First, Nixa Utilities charges its customers a base rate which covers the cost of operating and maintaining the grid and connecting to new homes.
Second, the utility says it must pass the cost of energy itself and Nixa buys from three sources: Nixa Solar Farms, Southwest Power Administration (Table Rock Lake Dam) and CU of Springfield.
Third, Nixa Utilities pays for transmission of the power from its source to the system.
The city says the rates Nixa Utilities pays to these suppliers fluctuates based on peak use and demand.
City Council will discuss what to do during upcoming meetings but will likely consider changing the rate formula so that it can adjust for the cost of energy. “Our goal is to keep electric bills from increasing more than 5% and ideally, when we renegotiate our energy purchase contracts, there will be enough savings to prevent any further increases for several years,” says Colvin.