Even the city of Columbia must keep utilities current

I really did not intend for a pun to appear in this column. But we’ve been using the phrase “keeping utilities current” over the last few weeks as we’ve talked about the need to examine what it costs to provide city utility services, and it just fits.

There are few issues more important to our community than the city’s ability to provide reliable, affordable and efficient utility services for residents and businesses alike. This is especially true of electricity, an area in which we need to be as independent as possible in a sea of changing regulations and market conditions.

We periodically conduct our own cost studies, but this year the City Council allowed us to hire independent consultants to conduct rate and cost-of-services studies for our utilities. Tom Unke with Virchow Krause & Co. is a nationally recognized expert in energy and utility management. He and his team are taking a methodical, independent and unbiased approach to evaluate current costs, existing rates structures and past practices in the city’s electric, water and wastewater operations.

Burns & McDonnell, another consultant with a long and strong track record in diverse project areas, will conduct the city’s first independent cost-of-service study for solid waste operations. The firm will review current practices for cost analysis, debt coverage calculations, cash reserve policy and rate design.

Since 1904, Columbia residents have supported municipal utilities as a way to ensure safe drinking water, reliable electricity and other services. Back then, the tax-paying public understood that voting to have a locally controlled municipal utility meant that any extra funds would be invested back into utility services, rather than going to a few private investors.

This remains a guiding principle for the city’s Water and Light and Public Works departments, the people who bring utility services to your homes and businesses.

As we forecast future needs and costs for electric, water and wastewater services, we must take an objective, professional view of all the issues.

To properly plan future utility rates and services, we must have a detailed and accurate picture of all associated costs. That includes costs for everything from running plants, to the materials needed for laying pipes and stringing wires, to time and staff. We think we have a good accounting of this, and we welcome any new information that will support our decision-making.

Most important, Columbia residents must be able to learn what the experts know. They expect and deserve a public debate that includes their voices. Other utilities may have less public scrutiny when designing their rates, but that’s not how Columbia’s city utilities should work.

Utility rates should allow our city utilities to recover operating costs and debt service while providing the capital needed to reinvest to prepare for future utility demands. This sounds fairly simple until we start thinking about how to fairly allocate these costs among all utility customers. And there are other rate objectives to consider.

For example, as we compete to attract new businesses and jobs to Columbia, do we keep our rates competitive with those in surrounding areas? As technology evolves, do we focus on rate simplicity and ease of implementation? Should year-to-year rate stability be our primary concern? What social concerns need to be factored in for elderly or low-income residents? Do we address environmental concerns through conservation incentives or other alternatives?

There are no easy answers, but the taxpaying public will have several opportunities to provide input and stay informed as we tackle these important community issues now and in the future. Our publicly owned utilities are valuable local assets that must stay “current” and serve all of us. Please stay alert for more information in the coming weeks, and let us know what you think.