A proposal under which the city of Lockwood, Mo., would have sold its electric system to the Empire District Electric Company for $700,000 was recently rejected.
The proposal, which was considered by city voters on an April 3 ballot, also called for granting Empire District a franchise to provide electric service to Lockwood.
Voters rejected the measure, with 60% favoring keeping the utility.
In a fact sheet issued prior to the vote the city noted that it currently has a contract with Empire to purchase power at a wholesale rate, with the city’s Board of Aldermen overseeing budgeting, hiring employees and setting rates.
The city said that the average 1,000 kWh per month residential customer would have seen approximately a $20 per month increase if the system had been sold. “If the city continues to operate the system a rate increase will be necessary to maintain the current budget. Rates were last increased in June, 2014,” the fact sheet said.
The proposed purchase price was determined using cash flow models, using the past three years income expenditures provided by the city.
If the sale had been approved, a franchise fee would have been paid by customers, generally 5 percent of the billing.
Based in Joplin, Mo., Empire District is a subsidiary of Liberty Utilities Co., which in turn is a unit of Canada-based and investor-owned Algonquin Power and Utilities Corp.
Best defense against a buyout attempt
“The best defense against a buyout attempt is a well-run utility and customer-owners who understand the value of public power ownership,” wrote Ursula Schryver, the American Public Power Association’s Vice President, Education & Customer Programs, and LeAnne Sinclair, the Association’s Director of Customer Programs, in the March-April 2018 issue of Public Power Magazine.
“Run your utility efficiently, remain accountable to customers, identify your strengths and weaknesses, and be on the alert for warning signs of a potential sellout before it comes. Act to address any problems at your utility and have a strong communication plan to educate and engage your community on core public power benefits,” wrote Schryver and Sinclair.
