Council Approves Lower Electric Rates for Nixa Utilities Customers

Council Approves Lower Electric Rates for Nixa Utilities Customers

February 18, 2022

Rate Change Takes Effect on April Bills

Nixa Utilities electric customers will soon experience something rare on their utility bills… prices going down per kilowatt hour. Nixa Utilities has not raised the rates charged for electric power since 2017, and at the February 14th city council meeting, council voted to lower electric rates for the next few years. Residential customers will see the rate drop about 2 cents per kilowatt hour (from over 12.3 cents per kilowatt hour down to 10.5 cents per kilowatt hour) on their April bill.

An annual 1.5% increase over the new, lower rate will take effect in 2023, to keep the electric rates up with the cost of inflation, but the 5-year rate plan means that in 2024, Nixa Utilities residential customers will be paying about the same as they did in 2017, while commercial and industrial customers will pay lower rates well past 2027 as an incentive to bring good jobs to Nixa.

Doug Colvin, Director of Nixa Utilities and Public Works, manages the operations of the utility. “For more than 5 years, we’ve been working hard to get to this moment. We have new agreements to get Nixa’s power at lower prices, reducing our utility’s risk exposure to volatile pricing on the open market,” says Colvin. “We also sold Nixa’s transmission system (which carries electricity into Nixa) a few years ago. That move saved us from expensive maintenance and regulatory compliance costs, while allowing the utility to pay off its debt completely.”

“All this work has made this moment possible, where we are able to actually lower rates while continuing to invest in improvements to our city’s electric grid,” says Nixa Mayor Brian Steele. “Now we’re spending down excess reserves to essentially give some of this money back to our customers through lower electric rates. For the next few years, we’ll be charging customers less than it costs us to buy power and maintain the system which carries that power to homes and businesses.”

“In 2017, Nixa Utilities had some of the highest electric rates in 417-land, but by the end of this 5-year rate plan, we will have one of the lowest electric rates in the region,” Steele says.

Even despite the surging prices caused during the winter storm in February 2021, Nixa Utilities held rates steady for its customers. Premiums associated with price spikes for power purchased from the national grid were paid using the utility’s reserves. “Going forward, an Energy Cost Adjustment charge on customer bills will spread out the cost of any surge pricing for future events, but won’t impact Nixa Utilities customers dramatically because the utility only purchases a relatively small amount of its power at the going market rates,” explains Colvin.

“The Nixa Utilities electric system is a point of great pride for our city. The ability to lower the rates we charge for this service is a moment worth celebrating. We hope it helps save our customers money while attracting new business investment,” says Mayor Steele.

Nixa Utilities is a not-for-profit public utility, owned by the Nixa community and overseen by Nixa City Council.

Example Bill Impacts:

Under the current rates:

Residential customer A using 1,000 kWh during the month would be charged $10 for service availability, plus $127.82 ($.12782/kWh for the first 1,000 kWh). So total electric charge would be $137.82 before any potential fuel cost adjustment.

Residential customer B using 2,000 kWh during the month would be charged $10 for service availability, plus $127.82 ($.12782/kWh for the first 1,000 kWh), plus $123.22 ($.12322/kWh for all excess kilowatt hours). So total electric charge would be $261.04 before any potential fuel cost adjustment.

Under the new rates:

Residential customer A using 1,000 kWh during the month would be charged $15 for service availability, plus $105.00 ($.10500/kWh). So total electric charge would be $120.00 before any potential energy cost adjustment.

Residential customer B using 2,000 kWh during the month would be charged $15 for service availability, plus $210.00 (single rate for all kWhs used, set at $.10500/kWh). So total electric charge would be $225.00 before any potential energy cost adjustment.

Learn more about this rate change:

The full documentation explaining the new electric rates and how energy cost adjustment is calculated can be found here: https://www.nixa.com/home/showpublisheddocument/16138/637801859908370000