Letter from the Mayor: February 2022

January 27, 2022

Low utility costs can help our community continue to grow and thrive. One of my goals as Mayor has been to hold utility costs as low as possible, both to go easy on our resident’s wallets, and to incentivize investment and business growth. At the last City Council meeting, staff introduced a proposed ordinance to adjust rates for the Nixa electric utility. It is normal for us to adjust electric rates on a rolling 5-year basis to make sure costs stay in line with revenues from the utility, but this new cycle is also unique. The rates we set for the next 5-year cycle are made possible by the culmination of 5 years of vision and hard work by council and city leadership. Our goal has been to make Nixa Utilities electric service more cost competitive regionally, and allow our utility to purchase power at lower rates from across the Midwest.

As an introduction, Council heard a presentation from Sam Hamra regarding the history and origins of Nixa electric. Sam, founder of Hamra Enterprises and owner of Nixa’s Wendy’s franchise, served as Nixa’s City Attorney during the 1960’s when the City of Nixa and local business leaders created the Nixa municipal electric utility. Sam told an amazing and humorous story on the issues and road blocks that faced those original founders. I encourage you to watch Sam’s presentation on our Youtube channel (His presentation begins around the 46 minute mark).

Over the last 5 years, council and staff have worked to get our electric rates down compared to other electric providers in the region. In 2017, Nixa Utilities had some of the highest electric rates in the Springfield metro area. These rates were based on the cost to purchase power from Springfield City Utilities (CU) and large debt payments on bonds used to expand the system to meet city growth. Starting with the Nixa Solar Farm in 2017, the city began replacing the power provided by CU with lower-cost options. In 2018, Nixa sold the transmission elements of our electric system, removing costly regulatory and system upgrade requirements and paying off all of the utility’s debt. In 2020, we moved to cancel the remainder of the CU contract, and created new wholesale power purchasing contracts at more competitive prices. Throughout this entire 5-year process, we kept Nixa Utilities electric rates the same, while other providers in the region enacted price increases.

With these changes in place, Nixa Utilities electric is now ready for its next chapter. Staff presented a 5-year rate ordinance which includes an across-the-board RATE REDUCTION for 2022 – especially for small and mid-sized businesses. You read that right, we want to LOWER the rate you pay for electricity! This one time price drop will then be followed by small and gradual annual increases (far below the current rate of inflation) so that by the end of the 5 years, we will again be charging about the same rate as we are today. All together, this new electric rate plan will make Nixa one of the lowest-cost options in our region. At the same time, we have moved to a power portfolio which includes almost 50% renewables – solar, hydro-electric and wind power. All of these changes make Nixa more appealing for business investment and prepare us for more economic development.

Hopefully, in 50 years I too, like Sam Hamra, will be able to return to council and recount this chapter of the Nixa electric utility story and how it changed the course of Nixa’s future for the better.

Sincerely,

Mayor Brian Steele