On Friday December 16th, the City of Pratt (CoP) Commission was presented with a comprehensive electric rate report from Toth and Associates. Toth is the premier company of consulting with municipalities for the purpose of assessing the financial health of a city and prescribing rate adjustments. The rate study confirmed what we at the CoP have known for several months; our cost to provide power to our citizens has increased dramatically. This is to say that our 2023 budget (which was approved in mid-2022) is unsustainable unless electric rates are increased.
Other highlights from the report are:
- The CoP is currently selling power as much as 30% less than other power providers in our area. Other providers have made appropriate adjustments for cost increases and inflation.
- Many equipment cost specific to providing energy, such as transformers, have gone up, due to inflation, as much as 200% in the last 24 months.
- Based on the analytics specific to the CoP, if we do not change our electric rates or electric budget spending the result will be a $1,700,000 budget deficit to the CoP for 2023.
The 2023 budget already reflects many frugal and fiscally responsible decisions on expenses for the upcoming year. Reducing the expenses in the 2023 budget would compromise the CoP’s ability to provide citizens with safe reliable power, deplete capital reserve plans that replace old and failing infrastructure, and jeopardize our ability to compensate and retain our employees.
The only sensible and prudent path forward is to raise utility rates to cover these costs, as strongly recommended by the consultants and our department heads. The CoP Commission wish to express our sincere concern to our fellow community members and power consumers; it is quite disappointing that the economic climate is such that we are forced to take these measures. It is our hope and expectation that we can formally reassess our financial position on an annual basis and make adjustments in the other direction.
Moving forward, the City of Pratt electric rates will increase in 2023. The specific amount of increase, for individual customers, will be in direct proportion to the number of kilowatts used. The City of Pratt will continue to do everything possible to keep our electric rates affordable while maintaining the high level of services our citizens have come to expect.