January 11, 2007

City Leaders Agree To Ride Out Wave On Electric Rates

In the midst of declining power surcharges and announcements of price hikes by neighboring service providers, the Memphis City Council indicated it will be standing pat with its electric contract with the Missouri Public Energy Pool (MoPEP).

When prices took dramatic increases during the summer of 2006, the city began investigating alternatives in an attempt to alleviate the financial burdens being generated by utility bills that had nearly doubled from the prior year.

The city had entered discussions with Tri-County Electric Cooperative regarding possibly selling the citys electric system to the power provider. The move was considered because of lower electric rates for the cooperatives customers.

However city leaders also met with MoPEP representatives who painted a more positive financial picture for the groups future prices.

After months of discussing the alternatives, the council met January 7 to finalize plans for the citys future power situation.

The consensus of the leadership was to remain with MoPEP.

I truly believe we are just a step ahead of the rest of electric customers out there, said Alderman Lucas Remley. I think we saw price increases last year that most everyone else will be seeing this year.

Remley added that any sale of the citys system would leave the residents at the mercy of the power provider.

Thats not what we want, he said. Look at the people in St. Louis who went without power for a week or more when the ice and snow hit them, he said. With our own power department we dont have to worry about that.

Alderman Ron Gardner noted that in discussions with other municipal providers that MoPEP was still the top option.

It seems like most of the cities out there looking for service options are picking MoPEP, so that tells you something, he said.

The council agreed that the idea of beginning the process of offering the five-year notice required by the MoPEP contract to exit from the deal was not very attractive.

Weve heard some legal opinions that we could start the process in case we did want out of the contract in five years, and then at anytime during that period, could say we changed our mind and wanted to stay, said Alderman Brian Brush. I dont think thats good business. If we start the process to get out of the contract, I think we need to be sure we want out, and I dont think we are sure of that by any means.

I understand the public may not be satisfied with our answer, said Mayor Roger Gosney, but I hope they realize that we took an honest, in-depth look at this situation and are making what we feel is the best decision for them. Right now we just have to ride the wave out and see what the future brings.

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