Every month the City of Naperville provides a newsletter ‘Naperville Connected’ along with the electric/water/waste bill. It’s purpose is to tell residents what city officials want them to know, not what residents need to know. If residents didn’t know any better, they would think all is well in Naperville, and that city officials are ‘on top’ of everything. It’s part of the job description for Naperville city officials; to tell part of the story, but only the part that makes them sound competent.
City officials announced in the most recent ‘Naperville Connected’ newsletter that ‘Electric Rate Increases Go Into Effect This Month’. Following is the newsletter, along with some Watchdog commentary:
“In recent months, the City of Naperville has been evaluating several methods to address a negative cash balance in its electric utility. This negative balance is due to costs of purchased power exceeding what was originally projected in a 2011 rate study, which was conducted prior to the City beginning to purchase power from the Illinois Municipal Electric Agency (IMEA).
Watchdog: basing a decision to purchase anything on information that is outdated by a year or two is a formula for failure as happened here. Who would purchase a home based on a two-year outdated home inspection.
The higher power costs are the result of several factors, including historically low natural gas prices, increased costs and lower efficiency at the Prairie State Energy Campus, which is one component of the IMEA’s energy mix, weather, and our energy efficiency.
Watchdog: Coming up with excuses seems to be part of city manager Doug Krieger’s strategy plan. Rather than demonstrating accountability, managing performance, thinking critically, and managing execution, excuses are the first and last explanations.
The utility as worked diligently to cut costs and has eliminated $7.6 million in capital and operating costs over the next two years. City staff recommended the City also consider potential rate options to help address the deficit. The recommendation to increase rates was not taken lightly and received significant discussion by the Council.
Watchdog: Cutting costs and eliminating waste should be standard operating procedure even without a negative utility balance. Rate increases typically are the solution to any City of Naperville need for additional revenue. Why? Because it’s easier than creative solutions or not having the problem in the first place. More time was spent discussing city council member compensation, than discussing electric rate increases.
Electric rates will increase by 6% in May 2014 and 7% in May 2015. This action does not completely erase the utility’s deficit; however, it will ensure further losses are not experienced and does not run the risk of over-collecting from the City’s rate payers. Naperville’s residential rates are anticipated to remain below those of ComEd’s. The average Naperville household that currently pays $92.69 per month can expect to pay $97.69 a month starting May of this year and $103.75 starting in May 2015.
Watchdog: The City can’t ‘ensure’ further losses. ‘Ensuring’ is a guarantee, and based on city officials miscalculations, they can’t guarantee anything. A prime example is their own calculations in the above paragraph. Increasing $92.69 by 6% is $98.25, not the $97.69 stated. And the 7% increase would make it $105.13, not $103.75. The City might respond, ‘Hey, what’s a couple bucks here or there.’ Well for residents, it’s the difference between trusting or not trusting city officials ability to do the right thing. If they can’t get this simple calculation correct, how can they competently get anything correct.
A pilot program for the City’s 20 largest utility customers to try time-of-use rates was also approved and will begin this summer. These customers, who use 25 percent of the City’s electricity may be able to lower their overall electricity charges by adopting these rates and shifting some of their usage to off-peak hours, which also benefits the utility by lowering demand charges it must pay. The pilot program will be evaluated to consider expanding it to other commercial and residential customers.
Watchdog: The pilot program will include about 100 tests out of about 53,000 users; that’s less than 0.2%. No successful corporation would base a fiduciary decision on a pilot program of less than 0.2%.
If city officials want to build trust with residents, here’s an opportunity. Include the City of Naperville, along with each member of the city council, and the city manager in this test program. Develop and share their plan to lower their electric consumption, by shifting their usage to off-peak hours. City officials can lead by example, and please, no excuses this time.