Gardner Energy may start offering incentive rates to new businesses.
Members of the electric utility board discussed a proposal that would offer reduced electricity rates of up to 30 percent to new commercial and industrial customers.
Under the proposal, a business granted the economic development rate would see a 30 percent reduction in rates in the first year, a 25 percent reduction during the second year, 20 percent reductions in year three, a 15 percent rate reduction in year four, and a 10 percent reduction in electric rates in year five. The customer would pay the full rate in year six and beyond.
Gardner Energy Electric Director Bill Krawcyzk said the developer of Midwest Commerce Center (MCC), Paul Licausi, has asked what incentives the utility board might be able to offer for a prospective warehouse. MCC currently houses the Coleman Warehouse. Millions of square footage in the development remains available for new warehouses.
Krawczyk said without the incentives, Gardner Energy’s rates for a large new warehouse would be about five percent less than the rates of Kansas City Power and Light, the electric utility’s main competitor serving Olathe and Edgerton.
However, KCP&L provides a rider that allows some incentives for new development.
“When you have a potential customer looking in Olathe, Edgerton and Gardner, and KCP&L has a rider and we don’t, we’re at a disadvantage,” Krawczyk said.
Utility board chair Lance Boyd was supportive of the idea, but said he’d like to see more specifics in whatever policy the board adopts.
For example, under the proposal the board considered on Oct. 4, the incentive rates would be available to new facilities that are projected to equal or exceed Gardner Energy’s annual system load factor within two years. However, if a prosepective new business can not meet the load factor, the utility board would consider other criteria, including: the number of new permanent full-time jobs created; capital investment; additional off-peak usage; or new industry or technology to Gardner.
“I just think there need to be some limiting metrics,” Boyd said. “It’s got to be measurable criteria.”
Board members Ryan Beasley and Eric Schultz did not attend the meeting.
Gardner Electric to consider new development incentive rates