City Utilities Board approves rate increase proposal and hears finance report
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City Utilities Board approves rate increase proposal and hears finance report
Springfield’s City Utilities Board met Thursday afternoon and approved a proposed 3% rate increase effective April 2027. The rate increase will now go to Springfield City Council who are expected to take up the measure at their meeting on September 8. City Utilities is reporting over $11.7 million in losses due to storms in April and June. CU’s CFO Amy Derdall said CU is eligible for federal and state relief to cover some costs from April. She also shared that CU is off budget for expected revenue from its off-system electrical sales.
Springfield’s City Utilities Board met Thursday afternoon and approved a proposed 3% rate increase effective April 2027 and a 3.6% rate increase effective April 2028.
CU expects the rate increases will generate $22 million in revenue. They expect the typical CU bill to go up on average $3.92 a month in 2027 and 4.83 in 2028, for a total of $8.75 over the two-year period.
The rate increases are necessary per CU, to fund $280 million in financing that was approved earlier this year to acquire three new natural gas combustion turbine units that are hydrogen capable and new zinc battery storage systems. The new infrastructure is expected to add 150 megawatts of capacity and 36 megawatts of power storage.
The rate increase will now go to Springfield City Council who are expected to take up the measure at their meeting on September 8.
The CU board also heard an update on finances Thursday. City Utilities is reporting over $11.7 million in losses due to storms in April and June. CU’s CFO Amy Derdall said CU is eligible for federal and state relief to cover some costs from April.
Derdall said CU is “eligible for 75% reimbursement from FEMA and 10% reimbursement from SEMA. The question will be,” she added “when will those dollars actually be realized and deposited in our bank account?”
Derdall shared that CU has just recently received funds from a FEMA claim from 2023.
She also shared that CU is off budget for expected revenue from its off-system electrical sales, that’s sales of power on the market not to CU customers.
“The price that the market commands,” Derdall explained, “based on the supply and demand, is lower this year than what we anticipated. Electric revenues are unfavorable to budget about $10 million, and most of that is driven by that market pricing.”
Despite that, Derdall said she’s confident in CU’s finances, with reserve funds on hand if necessary.
Derdall also reported July was hotter than average.
“Overall,” she said “our cooling degree days, or how often, you know, we expect people to use their cooling in their home was 11% higher than normal.”
Customers will likely see that increase in cooling days reflected in their bills.