The City Council of Webster City heard an update from City Manager Jeff Sheridan on comprehensive review of Webster City’s electric utility and rate structure. Sheridan made the report Monday night during the regular City County meeting, which was broadcast live via the Zoom conferencing platform and Facebook Live.
Sheridan said that in December 2019, he presented the results of a review of the water and waste water utilities, which included infrastructure, capital improvement plans, operations and rates.
“The electric utility and storm sewer system were the next on the list for thorough evaluations,” Sheridan said.
He reminded the council that in May, several local industries came forward with questions about the rates charged by the electric utility.
“The timing of those questions was very good,” he said, “because in June, the council approved the scope of work and a consulting agreement for a thorough review of the cost drivers for the electric utility, including the power supply costs and a fresh look at the rate structure for electric utility customers.”
The council hired a financial consultant and a firm that works electrical utilities to produce a study of the local utility.
“Normally, these studies can take from 6 to 8 months or more, depending on the scope of the review,” he said. The city recently conducted an electric rate study which was completed in 2017.
“That was a rate study only — not the comprehensive review we’re currently undertaking,” he said.
The city manager told the council that he expected to have some draft documents by the end of July or early August. On-site meetings would then be scheduled with the local industries in early to mid-August.
“We hope to develop initial alternate rate designs and discuss those with customers by the end of 2020,” he said, adding that he hoped the final implementation of the rate options would occur early in 2021.
Lori Mason of Seneca Foundry thanked the city manager for the update on the study.
“I’m glad to see that things are moving forward. It’s critical that it stays at the top of all of our agendas, not just for businesses but for residential as well.
“I appreciate the timeline. It’s exactly what we needed to make sure things keep moving forward,” she said.
She asked Sheridan if the goal for the city utility is to make a profit and how those revenues are used.
“It’s never about making a profit,” Sheridan said. “It operates for the benefit of its customers.”
Adequate revenue is needed to cover operations, investment in the future and the updating of infrastructure, according to Sheridan.
“There are lots of different pieces that go into that. I think you’ll have a much better understanding once we have a chance to sit down with each of the businesses with the consultant and myself,” he said.
Mason along with representatives of Vantec Inc., Tasler Inc. and Mary Ann’s Specialty Meats sat in on the Zoom meeting Monday night.
View this article as it originally appeared in the Daily Freeman-Journal.
Last modified: July 21, 2020