RSS Feeds
Contact Us |
|
|||||||||||||
Business » Local
Article rated a 0
by 0
users |
~ADVERTISING~
Increasing utility rate angers, concerns Traer residents
By JOSH NELSON, Courier Staff Writer
TRAER --- A proposed rate increase by Traer Municipal Utilities is raising eyebrows.
The plan would increase electric rates by 45 percent over three years. Officials said the increase is being considered ahead of the expected loss of Traer Manufacturing, which will close its doors in July.
Many business owners and residents are concerned the increase rises too sharply in too little time. At a forum Tuesday night, residents vented their frustration.
"When is enough enough? Because this is going to have a huge impact on the community," said Gretchen Pargeon, a resident and member of the North Tama School Board.
Pat Stief, general manager of Traer Municipal Utilities, said board members commissioned Latham and Associates, a consulting firm in Cedar Rapids, to conduct a rate study. The experts recommended a 25 percent increase the first year and 15 percent annual increases the following two years.
Instead, Stief said the board opted to spread the increase evenly over three years. Consequently, electric rates will increase by 15 percent April 1.
In a related issue, trustees approved a 14 percent increase in water rates March 6.
While the loss of Traer Manufacturing is the main reason driving the increase in electric rates, Stief said other factors are also in play. Federal deregulation of the electrical market has caused wholesale power prices to increase. That, coupled with the expiration of a long-term electrical purchasing agreement, meant Traer Municipal Utilities is at the mercy of the market, Stief said.
Many argued the rate increase will cause a ripple effect throughout the community, increasing costs for everything from nursing home care to local supermarket prices.
"When we raise these rates, ironically, everything rises," resident Ross Hamilton said.
Critics said other cost-saving measures should be enacted, such as cutting staff, before such a large increase is implemented. Traer Municipal Utilities employs 10 people, including some city staff members who hold dual administrative roles.
Stief said a number of efforts over the years have already reduced the utility's overhead. Some duties previously outsourced to contractors, like trimming trees and replacing electrical lines, is now done by municipal employees. That's saved more than $270,000 over the last five years, he said.
However, Stief said he doesn't believe cutting staff should be the first alternative.
"We lost one customer. That customer was 25 percent of our sales," he said. "One customer out of 1,000 doesn't necessitate staff reduction in my opinion."
Utility officials and their supporters said if a business moves in to take up Traer Manufacturing's electrical demand, an automatic rate adjustment will kick in for customers, lowering overall rates.
Kent Holst, president of the Traer Development Corp., said negotiations are ongoing with Wayne Industrial Holdings, a Canadian company that plans to move to Traer. The company builds street sweepers.
Contact Josh Nelson
at (319) 291-1565
or josh.nelson@wcfcourier.com.
The plan would increase electric rates by 45 percent over three years. Officials said the increase is being considered ahead of the expected loss of Traer Manufacturing, which will close its doors in July.
Many business owners and residents are concerned the increase rises too sharply in too little time. At a forum Tuesday night, residents vented their frustration.
"When is enough enough? Because this is going to have a huge impact on the community," said Gretchen Pargeon, a resident and member of the North Tama School Board.
Pat Stief, general manager of Traer Municipal Utilities, said board members commissioned Latham and Associates, a consulting firm in Cedar Rapids, to conduct a rate study. The experts recommended a 25 percent increase the first year and 15 percent annual increases the following two years.
Instead, Stief said the board opted to spread the increase evenly over three years. Consequently, electric rates will increase by 15 percent April 1.
In a related issue, trustees approved a 14 percent increase in water rates March 6.
While the loss of Traer Manufacturing is the main reason driving the increase in electric rates, Stief said other factors are also in play. Federal deregulation of the electrical market has caused wholesale power prices to increase. That, coupled with the expiration of a long-term electrical purchasing agreement, meant Traer Municipal Utilities is at the mercy of the market, Stief said.
Many argued the rate increase will cause a ripple effect throughout the community, increasing costs for everything from nursing home care to local supermarket prices.
"When we raise these rates, ironically, everything rises," resident Ross Hamilton said.
Critics said other cost-saving measures should be enacted, such as cutting staff, before such a large increase is implemented. Traer Municipal Utilities employs 10 people, including some city staff members who hold dual administrative roles.
Stief said a number of efforts over the years have already reduced the utility's overhead. Some duties previously outsourced to contractors, like trimming trees and replacing electrical lines, is now done by municipal employees. That's saved more than $270,000 over the last five years, he said.
However, Stief said he doesn't believe cutting staff should be the first alternative.
"We lost one customer. That customer was 25 percent of our sales," he said. "One customer out of 1,000 doesn't necessitate staff reduction in my opinion."
Utility officials and their supporters said if a business moves in to take up Traer Manufacturing's electrical demand, an automatic rate adjustment will kick in for customers, lowering overall rates.
Kent Holst, president of the Traer Development Corp., said negotiations are ongoing with Wayne Industrial Holdings, a Canadian company that plans to move to Traer. The company builds street sweepers.
Contact Josh Nelson
at (319) 291-1565
or josh.nelson@wcfcourier.com.
 |
More Stories from Business » Local
Due to the amount of spam and negative comments received, the Courier implement a registered-user system for participation in the comment portion of our site. In doing so, the Courier reserves the right to ban any user(s) at any time without notice if we feel they are not following the terms of agreement.
DISCLAIMER: The Courier provides our story commenting feature in order to solicit feedback, debate and discussion on topics of local interest. Please keep in mind that civility is a necessary component of productive conversation. All blatantly inflammatory or otherwise inappropriate comments (i.e. vulgarity, marketing, etc.) are subject to rejection and/or removal. Comments will appear if and when they are approved. For a more in-depth explanation of our policy, please see our Rules of the Road. Thanks for reading, and thanks for participating.
~ADVERTISEMENT~
NEWS |
SPORTS |
COMMUNITY |
BUSINESS |
ENTERTAINMENT |
FEATURES |
OPINIONS |
OBITUARIES |
CLASSIFIEDS |
PRIVACY POLICY |
CONTACT US |
CARRIER PAGES
|