For the first time in years, people buying electricity from Kirkwood will pay more than Ameren Missouri customers.
Kirkwood owns its own electric utility, covering about two-thirds of the city. The utility is increasing its rates for the first time in almost a decade, said Mayor Liz Gibbons.
Gibbons said the 14.8% increase is needed because the electric department overspent its budget as it completed a 12-year infrastructure upgrade. After a financial review, the city realized it needed to both rebuild cash reserves and account for the rising cost of energy.
“Our last rate increase was in 2016, so we've not been keeping up with the rate increases like we should, and coupled with the overspending of upgrading the infrastructure, we now need to increase our rates,” Gibbons said.
The city upgraded its transmission infrastructure and substations, while also installing smart meters to track outages in real time.
“We're always plugging our phones in. We've got electric cars that need to be plugged in,” Gibbons said. “There's just a lot of use of electric, and we needed to upgrade our infrastructure in order to handle today's living style.”
Ameren Missouri also recently increased rates by about 12%. The utility said the increase was needed because of investments it made to upgrade aging infrastructure and invest in cleaner energy.
Kirkwood is the only municipality to own its own electric utility in the St. Louis area, though many other Missouri cities also own their utilities, including Rolla and Hannibal. Kirkwood gets 60% of its power from a coal plant in Illinois and purchases 40% from the same regional grid that Ameren buys from, the Midcontinent Independent System Operator.
Next year, Kirkwood’s electric company will celebrate its 125th anniversary. Gibbons said Kirkwood’s city ownership model makes the utility directly accountable to the citizens.
“In Kirkwood, we don't have stockholders that we're trying to please,” Gibbons said. “It's just our citizens.”
In Kirkwood, rate increases are approved by the city council, rather than going through Missouri’s Public Service Commission for approval, as Ameren Missouri must do. The new rates went into effect Nov. 1.
