SIKESTON - An electrical rate increase is ahead for Sikeston residents.
While Sikeston Mayor Steven Burch acknowledged no one likes to increase rates, he and the rest of the city council unanimously approved the Sikeston Board of Municipal Utilities' request at Monday's special council meeting. The proposed rate for July 1 will increase to 7.4 cents per kilowatt hour for residential customers up from 6.2; 8.5 for commercial customers an increase from 7.0; and 5.9 per kilowatt hour for industrial users, up from 5.8.
"We have done everything we can do. We have to act now or we are in trouble," Burch said prior to the vote. Failure to raise rates, he explained, could result in the city losing control of the power plant.
Questioned about why additional increases are needed, BMU General Manager Rick Landers explained the previous increase, which was phased in over several years, covered the dramatic increase in coal costs.
In the meantime, Landers continued, the sale of excess power on the spot market, which had ranged around $20 million for BMU from 2010-14, dropped dramatically in 2015 and 2016 due to the use of wind power and natural gas along with regulatory pressures. The spot market revenues, he said, were used to maintain the city's low rates.
Several residents attended the public hearing. John Graham expressed concerns about those living on fixed incomes and how they will deal with the increase costs.
Burch responded the rate hike was demanded by bond holders. While the bonds will be completely paid in five years, the mayor noted the bond holders are seeking assurances the power plant's operation costs will cover the bond payments now.
Previously the Council noted even with the rate increase, power costs to local consumers are much lower than many other communities, not only in Southeast Missouri but nationwide.
James Crowe asked if BMU had not purchased the former Bootheel Golf Course would the rate increase be avoided. According to Landers, it would have only provided three or four additional months.