April 20, 2014

Maybe it’s time to just shut up and sell

Yes, we said it, “Shut up and sell.”
Years of debate, and we’re back to the drawing board with the city’s electric company. Every few years, the Gardner City Council wastes hours of city staff time and council time debating the merits of a dozen different ideas regarding Gardner Energy.
The discussions are often mired in emotions, personalities, control and power, and what’s lost in the discussion is the effect any decision has on rates and residents. The fact consumers have complained about high bills and expensive and arbitrary late payment fees seems lost in the debate.
Gardner is one of the few Kansas municipalities to own an electric utility, and it seems no one is quite sure what to do with it. In other cities, including Edgerton and Spring Hill, electricity is provided by private companies such as Kansas City Power and Light or Westar Energy.
Those companies are regulated monopolies and subject to the Kansas Corporation Commission, which requires rate hearings, handles customer complaints, oversees the cold weather rule, reserves, deposit and bill payment arrangements and sets electric rates, as well as limiting, while guaranteeing, a fair profit.
As a municipal utility, the Gardner Electric Utility Board, or city council, are not subject to oversight.
Options for the utility’s future are almost as vast as the prospects for a newborn baby.
In recent years, city councils have discussed selling the utility, creating a private-public partnership to run it and expanding or squelching some of the powers of the city’s EUB. The board itself was a creation born of a 2008 debate about what to do with the city’s electric utility.
A few short years ago, the utility was just another city department, similar to the water and wastewater departments. Back then, electric rates outpaced those of most nearby private electric providers. Since the creation of the EUB, an appointed board tasked with running the utility in a business-like fashion, rates have stabilized, and the board has not raised rates, except pass-through fuel costs. They’ve also created a large rainy day fund.
That was their first mistake, and it may yet prove to be a fatal one. Large piles of money attract the prying eyes of other city departments and ultimately, the city council. It would have been wiser to use what appear to be extravagant rainy day funds to lower residents’ rates. Instead, in addition to amassing a large savings account, the EUB began planning for the future in ways they probably never should have. For example, at one point, the EUB was spending thousands of dollars in radio advertising to attract people to the Festival on the Trails. Their stated purpose was to attract potential residents and businesses to town, which would in turn add to Gardner Energy’s customer base.
It’s those kinds of decisions that have created perception problems.
To be honest, we’re quite frankly sick of years and years of debate.
The city council seems unwilling to make a decision about the future of the EUB. The last council reached a consensu to consider creating a board of public utilities to oversee electric, water and wastewater, but never acted on it.
Now they’re pulling in some of the board’s powers, potentially neutering the board completely, saying the current board’s authority is outside what’s permitted by Kansas statute.
It may be worth it to quit talking about it and attempt to sell it once again. Mayor Chris Morrow said that KCP&L, the company initially interested in purchasing Gardner Energy, is no longer interested. That may be true, but no one can be certain until the utility is placed on the market.
The sale could garner the city a pile of cash that could be used to maintain roads and existing infrastructure in water and wastewater. A sale would certainly spare some staff and council time.
Selling it would end years of personality and power struggles.
Most importantly, selling it would provide ratepayers a regulatory authority that would oversee rates, rules and profit margins.

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