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Nixa dropping electrical rates starting with April bills

Published: Feb. 23, 2022 at 5:45 PM CST
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NIXA Mo. (KY3) - No one likes it when their utility bill goes up but in this time of inflation where almost everything is costing more, here’s something to warm your heart.

The city of Nixa is actually lowering its electrical rates after the city council approved the move on Valentine’s Day no less.

Nixa Utilities and Public Works Director Doug Colvin said that since Nixa’s last rate increase in 2017 he’s been working on bucking the trend on annual rate increases.

“It doesn’t happen very often to go five years without adjusting the rates at all,” he pointed out. “Typically we’ll do small increments every year. But I’ve been doing this for a little over 30 years and this is the first time I’ve ever been able to purpose a rate decrease on anything.”

Residential customers will see the rate drop 2-cents-per-kilowatt hour on their April bill which may not seem like much but it means that someone who currently pays $138 a month will see their bill go down to $120 and someone who pays $260 dollars will drop to $225.

There is a caveat though. Starting in 2023 the rates will slowly start to increase again to keep up with inflation.

But at least that increase will begin with you paying a lower rate than you would have been before the change.

“It’s kind of resetting the base,” Colvin explained. “Then from there we looked at what our capital investments are going to be for years out into the future and we’ll set up a 1.5 percent increase each year through 2027.”

So why is Nixa able to drop its rates?

“We sold our transmission system,” Colvin answered. “That allowed us to pay off the debt we had. Fortunately we have an electric utility that is debt free right now. What we had was about 10 miles of transmission line. It mainly just tied together our four substations. So owning and maintaining it was more expensive and now we’ll save in the long run.”

And while Nixa still gets its power from a nearby solar farm and Table Rock’s hydroelectric system, the utility has diversified.

“We also entered new power contracts,” Colvin said. “Those were considerably cheaper than what we were paying before. We’re actually going to be able to save somewhere between $3-4 million a year in power costs.”

Nixa commercial and industrial customers are getting even lower rates than residential customers as an economic incentive to keep and attract more businesses.

“Also some of the business rates we had were actually subsidizing the residential side so we realigned that,” Colvin added.

Jayne Young is both a Nixa resident and business owner and the Allstate agent is appreciative of the good news.

“I’m thrilled,” she said. “This is why we chose Nixa to live. As a resident it’s more money for all the things we have to buy as parents. And as a business owner I’m even more thrilled because that’s more money I can reinvest back into my business for marketing and my employees. Every little bit counts so I think it’s amazing. Everyone in Nixa just seems to really get it and help each other and support small businesses. And most of the businesses in Nixa are small. We’re not big companies taking tax breaks or anything like that. We’re small businesses who are pinching pennies trying to stay open. And it does wonders for the community the more small businesses we have here.”

All those rate adjustments may be subject to change either up-or-down depending on potential fuel cost adjustments.

“We have a very small portion of our energy that’s exposed to the market, probably less than 10 percent,” Colvin said. “So I feel very comfortable that any adjustments we have are going to be very, very small.”

However events like the current Russia-Ukraine situation can play a role.

“Russia is a huge natural gas supplier for Europe,” Colvin explained. “And that affects global prices as well. So if we were to see a huge spike in natural gas prices in the United States that’s going to drive some of that electric cost up because some of the power we are buying comes from natural gas. So yes, the price of natural gas could affect this.”

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