Members of Gardner’s Electric Utility Board passed a $15 million budget on July 9 that projects no electric rate increases for the next five years. The budget effectively pushes rate increases beyond 2018. Last year’s budget also anticipated no rate increases before 2017.
“We have budgeted every penny of our revenue for 2013,” Gardner Energy director Bill Krawcyzk told the board as he presented a proposal for next year’s budget.
He anticipates the utility will collect $15 million in revenues – more than $13 million of which will come from electric retail sales or utility rates. The remaining $2 million will come from interest on investments, reconnect fees and penalties, temporary service fees and meter installations.
Krawcyzk projected that the utility will spend an equal amount next year. More than $8 million will be used to generate electricity; another $2.9 million will be used to distribute energy; $657,000 will fund administration of the service; $1.7 million will make debt payments; $795,000 will go to the city in the form of franchise fees; and a little less than $1 million will be used to fund capital improvements.
The utility board agreed to spend $350,000 next year to purchase selected KCP&L customers that live within the city’s boundaries. Additionally, the board approved upgrades to existing electric systems.
The utility fell short last year in reaching savings goals the board set a few years ago. The goals include $2.7 million in an operating reserve fund and $3 million in a capital replacement reserve fund.
To date, the electric utility has stashed away $3.2 million in the operating reserve fund, which is higher than the board goal, and $2.1 million in the capital replacement fund.
Krawczyk said he plans to ask the board to approve transferring the additional reserves in the operating fund to the capital replacement fund at a future meeting.
The Gardner City Council will be asked to approve Gardner Energy’s budget as part of the city’s budgeting process. Krawczyk will present the utility board’s budget during the July 16 city council meeting.
The electric utility board canceled a scheduled work session set for that same day. Its next meeting will be at 7 p.m. on Aug. 2 at city hall.