Lake View City Council looking at 14.9% electrical rate increase for 2011

“Nobody like increases, but this is the reality of the world we live in today”
- Andrew Ross, NMPP representative



LAKE VIEW, IOWA – DECEMBER 6, 2010

(City administrator’s instructions to the council)


NMPP is a non-profit organization that sells wholesale electricity, retail electricity, wholesale gas, and consulting services. You can read more about them at http://nmppenergy.org

Six months ago, the council gave Mr. Ross the go ahead to do a cost of service study. His visit on December 6, 2010 marked the first step in implementing that study; specifically a review of how exactly the rate design will work.


Mr. Ross presented the following executive summary of the process. Please feel free to follow along on the videos following:






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(Line 6 MISO explained.)


1. NMPP recommends a 14.9% increase.
- Recommended to be in may March, 2011.
2. May need another 11.9% increase in 2012.
3. This will allow the city to start building up a cash reserve.
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Questions and discussion
1. Can this be put into effect faster to avoid having two rate raises so close together?
2. Can this be synced up with our fiscal year?


COST OF SERVICE SIDE



DISCUSSION ABOUT WHETHER CITY SHOULD PAY FULL COMERCIAL PROCE FOR POWER


1. WAPA drought and MISO main force driving rate increases.


1. Wind energy has a lot of issues.
- Has enormous transmission constraints.
- Wind blows when people don’t need power.
- Can’t “order up” extra megawatts of power.
- Have to build a wind farm in the middle of nowhere and build huge infrastructure to transmit it.
- It is not a base load resource.
2. Might be smarter to merely purchase wind energy rather than owning a windmill.
3. Wall Lake’s Market has gone away.


1. City council revisits the question of windmill.
- Is more expensive than other sources.
- City would be trading 2 cent power with 5 cent power.
2. Council authorizes Mr. Ross to start designing the new rates, which he expects to take a 14.9% increase in 2011 and a VERY tentative 11.9% increase for 2012.
3. WAPA allocation is extremely important to the city, and it may be usurped by other more power groups and taken away from small towns using it in the next 5 to 10 years.


1. Ross kibitzes with Lake View Resort editor, council.

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