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Council compares local utility rates to other cities

Worthington City Hall (Brian Korthals/Daily Globe)

WORTHINGTON -- Just before approving the special street lighting utility charge, the Worthington City Council learned how Worthington's public utility rates compare to similarly sized cities.

At their Monday meeting, council members viewed a presentation of electric rate study results from Worthington Public Utilities General Manger Scott Hain.

Hain presents the results of two surveys -- those conducted by Minnesota Municipal Utilities Association and Owatonna Public Utilities -- to the Water and Light Commission on a periodic basis, but the rate issue has been brought to the forefront by recent spikes in power transmission costs.

"It has more than doubled from 2009 to 2010 ... it's not going to go down anytime soon," Hain explained. "We pay a third party transmission provider to deliver our power and energy to the town based on our peak kilowatt hours used. When we set a summer peak, we will pay for no less than 90 percent of that peak throughout the year."

"We pay for more electricity than we actually use," added Alderman Ron Wood.

That's part of the reason WPU has begun rolling out a load management system that should shave kilowatt hour use from air conditioning units in the summer.

When it comes to consumer rates, Worthington wasn't always the cheapest of the participating municipalities -- but it did fall below average in the MMUA study.

The study showed the cost per kilowatt hour (kWh) for the month of November 2009. Among residential properties using 500 kWh, New Ulm was among the highest, with a cost of 13 cents per kWh, Worthington was around 8 cents per kWh, and the average of the 87 municipalities surveyed was about 10 cents.

Average rates for commercial and industrial properties ranged from 8 to 10 cents per kWh, with Worthington hovering around 7 cents.

The OPU Survey included 11 municipal utilities, two rural electric cooperatives and two investor-owned utilities. Annual consumer bills for residential use ranged from $1,100 in the Steele-Waseca Cooperative to about $650 in Worthington.

Council members noted the city's relatively low utility costs could be an important economic development tool, brining would-be businesses to town - but Hain did not know of any local business for which that was the sole motivating factor.

Even so, "Worthington has had the lowest residential rate in all those surveys," Hain said of the OPU Survey, which began including Worthington nearly a decade ago.

In other business, the council on Monday:

- Appointed City Administrator Craig Clark and Director of Public Safety Mike Cumiskey to a subcommittee that will develop a joint powers agreement for the Public Safety Answering Point Consolidation group.

- Approved a resolution establishing the required street lighting system revenue as $250,000 and the base service charge rate as $52.20. The rates will be effective on the October utility bills; the monthly residential charge will be $4.35.

- Accepted a state grant for $3,150 toward the total cost of preparing a Storm Water Pollution Prevention Plan required at the airport per the statewide NPDES Industrial Storm Water Permit. The city's share of the cost will be about $1,750. Council has approved a task order with Mead and Hunt for development of the plan.

- Welcomed new honorary council member Robert Tims.