Uncategorized Osage City adjusts electrical demand rate program

Osage City adjusts electrical demand rate program

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OSAGE CITY—Greg Wright, Emergency Management Group, presented the city’s incentives for larger businesses during the Oct. 13 meeting of the Osage City Council.

The city offers two opportunities for high demand customers to qualify for reduced rates. The electrical incentive allows new businesses to qualify for a break when beginning operations.

“It’s an approved policy that you guys allow new businesses to apply for and get a five-year discount on electric bills to get new businesses started,” said Wright. “It allows you guys to attract new businesses with favorable electrical rates.”

The policy gives a 50 percent reduction in rates the first year, which reduced by 10 percent each following year. The incentive provides a maximum 10 percent reduction for each $100,000 investment and/or a one percent decrease for each full-time position created.

“That’s been in place for a while,” Wright said.

The city recently adjusted to insure the cost of the program was not being supplemented by other customers.

A second option, a demand energy rate program, rewards businesses that use more power during off-peak hours.

“A good load factor rate is going to see an incentive,” Wright said. “The recommendation is we modify that rate, drop it from a 100 KW minimum, down to 50 KW. 100 KW or more is not a huge customer, but for you guys, there’s a lot of 50-100 KW size businesses that you would like to attract to this community that could possibly benefit from being on this rate.”

Existing businesses could also qualify for the rate.

“If we do that, you have what’s called rate migration,” Wright said. “Customers that would fall under this rate would just move over.”

Wright said it’s a revenue reduction.

“You have to be aware of this,” Wright said, but said it doesn’t really hurt the city to make the change.

He gave an example of a high load-factor customer, which purchase more power during off-peak hours at a cheaper rate. He said only customers who have steady load factors would benefit from the rate plan.

“They would have to do some analysis to see if it is better for them,” Wright said. “It requires additional metering, and it’s been working out now.

After little discussion, the council adopted Ordinance 1593, reducing the qualifying rate from 100 KW to 50 KW.

In other business, the council:

• received a letter of assurance from the Osage City Library Board, informing the city that no additional funds would be needed for the planned $250,000 community room expansion. The council approved the agreement with the library.

• approved a $161,748 bid for a two-inch mill and overlay of Sixth Street between Holliday and Main streets, and a three-inch mill and five-inch overlay of the parking lot of the community building. The project began the next day.

• approved a $2,850 bid from Theel Plumbing to replace the heating and air conditioning unit at the city shop. The council chose the local bid, which was $50 higher than the low bid, and discussed a local preference bid policy.

• adopted ordinances 1594 and 1595, updating the uniform public offenses and standard traffic ordinances.

• heard an update from Terri Fultz, city clerk, who voiced a concern from Bruce Schoepflin about city utility bills.

“It’s just new software, we’re trying to work the bugs out,” Fultz said. “It was better this month. We’re working on it.”

• scheduled the next meeting to begin at 6:30 p.m. Oct. 27 at the wastewater treatment facility, to allow new council members to tour the lagoons.

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