For the first time in 20 years, Columbia residents might see higher electric bills.
If the Columbia City Council approves a new three-year contract with Ameren Energy Marketing, higher rates might appear on utility bills as soon as October 2004.
“There is a good chance that the contract will be approved,” Third Ward Councilman Bob Hutton said.
Dick Malon, director of the Water and Light Department, said rates could rise by as much as 10 percent over the next few years, but the increases will be phased in. For an average household, which now spends $56 a month or $672 a year on electricity, the cost could rise by $5.60 a month or $67.20 per year by the time the increases are complete.
“That’s our worst-case estimate,” Malon said. “We will have to wait until October of next year to find out.”
The three-year contract under discussion would replace a 10-year contract with Ameren that expires in May 2004. It would produce the first rate increase since 1983.
Malon said that a three-year contract is atypical but that “we took proposals and evaluated them, and this was the best one.”
The possible rate increase reflects changes in the way energy is distributed.
“The industry is in a state of flux,” Hutton said. “What they are finding is that because of deregulation, buying power isn’t as easy as it was 10 years ago. There isn’t a consistent way to move energy from one site to another, and so no one will commit to the price of energy.”
Representatives of Ameren Energy Marketing declined to talk about the reasons behind the higher rates.
Council members and officials from the Water and Light Department will discuss the contracts during a budget work session that begins at 6 p.m. tonight.