“The PPA that appears on city utility bills is there to stay, no matter what” were the words of electrical engineer consultant Dean Parks, with Barnes, Henry, Meisenheimer & Gende, Inc. (BHMG) of St. Louis, as he advised Mayor Eddie Maggard and city councilmen that the city’s additional electrical charge, or PPA (Purchase Power Adjustment rate) will never go away.
Recapping Ava’s process over the past few years, Parks said the energy market rates started going up in 2004, and then went “wild” soon thereafter. Before long the City of Ava was faced with substantial rate increases from Sho-Me Power, as well as the prospect of annual rate increases through 2013. During that time, rates throughout the marketplace were on the upswing.
The purchase of electrical power will continue to be more costly, and the PPA line item, the additional 4¢ per kilowatt hour charge, will always be a factor of the formula. It shows the direct cost to the end-user, $1 for $1.
Parks commended the city on it’s February 2009 decision to change power providers and join MoPEP. The decision was in the best interest of residents, and it is still the best choice in today’s market. Parks noted the city’s present plan actually saves residents money.
For example, if the city were to consider a flat rate billing system, present rates would have to be increased. Higher rates would be necessary because the city would have to accrue extra fund balances to cover unforeseen cost surges and market fluctuations. Flat-rate billing would raise rates, and cost residents more each month.
Through MoPEP, the City of Ava has the capability to purchase power from an energy pool which offers more stable pricing, and traditional cost assessments. The city also has some control over it’s in-house electrical expenses by overseeing proper maintenance of poles, materials, wires, employees and benefits.
However, Parks noted city utility bills might appear less confusing if the PPA charge was added into the main line item and shown as one total rather than two separate costs. This format change would not modify costs or adjust the rate of the bill as the PPA rate will still be charged; however, it might be easier for residents to understand.
Council opted to combine the two separate line items into one line item so the PPA and standard rate will show as one cost. The goal is to make utility bills less confusing for residents.
The City of Ava has been awarded a Source Water Protection Grant from the Department of Natural Resources. The grant amount is $12,000, and according to Janice Lorrain, Director of Planning and Development, a contractor will be hired to oversee the project.
Lorrain also noted drawings for the Wal-Mart remodel had been approved and a building permit will be issued this week. Wal-Mart is remodeling the interior of the store building.
During closed session, council hired Kenny Pierce as an employee in park-grounds maintenance.
For summer jobs at the city pool, Bradley Mills and McKayla Ranse were employed in concessions, and Brandi Linder and Bridget Loftin were hired to fill positions at the front desk.
Aldermen Burrely Loftin, Billy Long, Ric Engelhardt and Judy Lovan were present.
The Board of Aldermen will meet again on Tuesday, May 24, 5 p.m. in council chambers at Ava City Hall, 127 SW 2nd Avenue.
Meeting video may be viewed here: http://www.vimeo.com/23561192
