05/2/08
The effects of the Baldwin City power setup are felt most heavily once a month when customers check the mail and open the bill.
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Baldwin City’s rates are higher – 10.3 cents per kilowatt-hour compared to Lawrence’s 6.25 cents per kwh, but city council member Tony Brown said the city’s method of providing electricity comes with two main advantages: lower prices over the long term and the ability to quickly restore power.
While other communities that do not have the ability to produce power are subject to the rate demands of large companies, Baldwin City can control its own fate and keep rate increases smaller in the future.
“It evens things out for the long run,” Brown said. “Right now, it doesn’t look good. (The rates) will go up, just not as quickly. Our increases will be on average less than others.”
Even though Baldwin City purchases most of its power and only produces its own electricity during peak times in the summer and winter, City Administrator Jeff Dingman said the city would have to pay much more than the current $30 per megawatt hour to buy all of its electricity.
Dingman said the reason Baldwin City’s electricity rate is more expensive than surrounding communities is because fewer customers support the system.
“Folks that live outside our area have a lot lower rate for kilowatt-hour mainly because we have a smaller group of people to support us,” Dingman said.
Energy consumers like Kevin Bennett are not interested in the long run when their bills right now are nearly double what they would be in another community. Bennett owns Maple Leaf Motel and Tire.
His bill usually averages about $2,500 each month, even though he uses a gas heater to warm the office in the winter.
“I use as little electricity as possible because it’s so blasted high,” Bennett said.
His bill skyrocketed to more than $3,000 one month because of a faulty meter, and the dispute along with his consistently expensive electricity bills have led him to put his business up for sale.
“It’s totally because of the city,” he said.
Bennett plans to move outside of the Baldwin City limits near his sister, where he expects his bill to be cheaper. Bennett said his sister has a $180 electricity bill each month for a 2,800 square foot modular home completely powered by electricity. In contrast, he pays about $250 each month for a 1,200 square foot home on Sixth Street that is also powered with gas.
Ivan Huntoon, Baldwin City chamber of commerce president, said the high energy costs compared to surrounding cities is one concern in attracting new businesses.
“We’re currently working with the city trying to help come up with a policy that might attract businesses or incentives that might be offered,” Huntoon said.
The economic development council is working with the chamber and the city to make sure the electricity rate doesn’t prevent commercial growth in Baldwin City. Council Treasurer Jay Randels said one thing being considered is a discount usage rate for retailers that employee several people, although nothing definite has been decided.
“We’re looking for something to help overcome the lack of competitive edge in utilities,” Randels said. “It’s something we’ll continue to discuss. We want to make Baldwin City as competitive and viable as other communities.”
Businesses also consider the availability of property and labor and the potential customer base, Randels said, so the energy rates are probably not the deciding factor for most interested businesses. He thought residential users were more likely to be affected as energy bills took away from disposable income.
Ted Krosier is one resident who has experienced the bite of a soaring energy bill. Krosier moved to Baldwin City from Wellsville two years ago, and he thinks about moving out of town all the time because of the energy cost.
“It was a surprise when I got the bill,” Krosier said of the first time he received a Baldwin City electricity bill. “I just called and had it hooked up when I moved here and didn’t think about it.”
Krosier downsized from a five-bedroom house in Wellsville to a duplex in Baldwin City, but his bill increased by about $100.