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Council Votes 4-2 to Raise Kirkwood Electric Rate

The new rate for Kirkwood Electric is lower than Ameren's. Customers' bills will increase $76 a year on average.

Customers of Kirkwood Electric will pay more this year due to a rate increase approved by the Kirkwood City Council. 

Councilors voted 4-2 in favor of a bill that sets the electric rate to 9.86¢ per kilowatt-hour for a typical customer.

The rate will increase the average customer's utility bills $10 each month from October through May but will decrease utility bills $4 each month from June through September for an annual increase of $76.

Under the new rate, customers will pay $9 a year less than those with Ameren. The increase is the first for the public utility in three years. 

"We're doing this at a level that is still making rates competitive and our rates are lower than Ameren at all our rate classes," Kirkwood Electric Director Mark Petty said. "The goal of public power is to be low cost and affordable and to a large degree not for profit."

Petty said that the increase is needed to modernize the public utility, particularly to pay for new substations.

The measure met with mixed reviews from councilors who voted for a second and final time on the bill at their Feb. 7 meeting. 

Councilors Gina Jaksetic and Gerry Biedenstein voted against the increase.

"We're not in a position of having to play catch-up with power facilities," Jaksetic said. "We're consistently adding to cash reserves and loaning out to other departments. This, of all the entersprises, is on pretty solid ground."

Biedenstein noted that the city has been charging more than Ameren for the past two and a half years. 

Councilor Bob Sears spoke in favor of the rate change.

"Nobody is making money off the profits," Sears said. "They're being invested in this community instead of some Ameren investor's pocket. This is the right business decision to make."

Mayor Art McDonnell also noted how Kirkwood Electric benefits residents.

"We are giving dividends back to the community because of the success of the power company," he said. "Nobody likes to pay more in electrical costs but we need new substations."

The new rate will generate $760,000 a year more in revenue for the city and ensure healthy fund balances in the coming years, according to Petty. He adds it also will help maintain the public utility's bond rating.

"We haven't just done this thing in a happenstance manner," Petty said. "We don't do these things without careful investigation and looking at the situation properly to make sure it reflects the economy."

Patch Editor Gregg Palermo contributed to this report. 

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