Town addresses electric rate increase

 On Thursday, Sept. 24, the Town of Basin held a public meeting to address a proposed electric rate increase. 

The town of Basin is one of many communities throughout Wyoming, Arizona, Colorado, Montana, Nebraska and New Mexico experiencing large rate increases.  

In Basin the electrical grid is owned by the town, and they are the provider of electricity to residents. In towns like Greybull the grid is owned Rocky Mountain Power.  Big Horn REA is another provider in Big Horn County.  Customers for both will likely face similar increases since some of the service lines operated by Western Area Power Administration (WAPA) are now operated by Southwest Power Pool (SPP). 

Mayor Duncan explained, as he had at previous meeting, the town had been notified by Municipal Energy Agency of Nebraska (MEAN) there would be an increase because of the change. They, like other communities, budgeted for the increase based on the estimate they had been provided.  The estimate for Basin was $8,000. The actual fee increase went to over $17,000. The increase to the town started on July 1. The same date as the increase to town residents. 

The Town of Torrington’s fee increase was estimated at $38,000. The actual increase was $110,000. Communities are left with no choice but to pay the increased fees. Duncan noted, “We don’t have power unless it’s brought to us.”  He added that the town of Basin has carried the difference in the transmission fee since July 1. This will cause a deficit by the end of the fiscal year in the electrical department fund without the emergency increase. 

Currently the residential base rate fee in Basin is $31.80 a month. It covers most of the town’s infrastructure costs. The proposed rate increase changes the residential base rate to $48.00 effective Jan. 1, 2027. 

Town resident and business owner Wayne Riley asked if a reason was given to the town for the increase being double what the estimate was. Duncan replied, “There are multiple components that have to happen. We buy bulk power directly from MEAN who purchases space on the transmission line that the Federal Government owns. We used to purchase space from WAPA. They sold out the transmission to SPP. When they sold out that transmission line SPP said we are going to increase all your rates.  The only people we can communicate with fluently is MEAN. The information that they got regarding the increase was wrong. The information that we got was wrong.” 

AUDIENCE QUESTIONS/COMMENTS 

 Town resident Diana Burch asked if the increases were going to be yearly or was this a one-time increase. Duncan answered that MEAN has told the town that the cost of power will be increasing next year. “It’s the same conversation but a little bit different. They are not going to charge us more to get it here but the cost to purchase it is potentially going to go up.”  He added that MEAN has told the town in the past that increases have been likely each year but most years that hasn’t happen. However, based on the market today, Duncan would bet that yearly increases in usage will happen. 

Audience member Barbara Johnston clarified that if a customer wants to lower their bills, they will have to do so by conserving usage. “The transmission cost doesn’t change if they use one watt or 1000 watts.” Duncan confirmed. He added that the town will be charged the transmission cost whether usage goes lower or not. 

Resident and business owner Jennifer Riley asked if there were any grants available to help. Duncan said he was not aware of any. Riley said she would look for some. 

Another town resident, Mandy Sherburne, noted that she understands about the transmission fee but stated that town residents have had rate increase nearly annually for the last five or six years. Could the town pull money from other places within the budget to help with the cost. “We can’t…especially the older people living on social security, can’t withstand that increase. It doesn’t seem like much, but it adds up to quite a bit they don’t have.” 

She recognizes that the town has been looking into finding solutions, at the same time she wants to stress the importance of people being able to stay in the community. “We pay more in power than every town around us by a lot.” 

Duncan countered that the town’s “base rate currently is $5-$10 less than any other entity around us, including REA, including Rocky Mountain Power but our kilowatt hour usage fee is more. We charge you less to get it to you than other companies for power usage.” 

He wishes there was a magical formula that Basin could use to receive utilities at a decreased rate…everyone at the town would go for it. “We purchase water from an out-of-town source. We purchase electricity from an out-of-town source. We are making progress on our sewer system that for the last sixty years has been failing.” 

Sherburne asked it the town had considering replacing the sources with other entities. Town electrical foreman Ray Huggins elucidated, “Greybull gets cheaper power because they have Rocky Mountain Power because Rocky Mountain (parent company) is coast to coast. They buy power in bulk mass quantities. There is no other place that we (town of Basin) can buy power. The REA buys power from the same place that we do.” 

When asked why the town couldn’t purchase from Rocky Mountain Power by several audience members. Duncan expounded that the town could, but that Rocky Mountain would mark it up because they are purchasing their power from the same company the town does. If the town brought from the REA, the town would pay the same rate as their base customers, which means the cost again would go up because the town must recoup enough money to maintain and buy equipment, staff and infrastructure. “Just because they are buying bulk power at the base rate, which is basically the same rate we are, from their supplier, which is a little bit different than ours. It is still coming across the same transmission lines. The WAPA line did get sold to SPP. I guarantee that they are having very similar conversations within their board that we are. 

Duncan also noted that RMP owns the power grid in places like Greybull. They own the lines, the power poles, the transformers. The people in Greybull are electrical customers of RMP not the town of Greybull. 

Peggy Danna stated that the difference is that Greybull doesn’t have an electrical department. The town of Basin is paying for that department and buying the power. 

Duncan provided background. “Basin has its own power grid because we used to generate our own power off natural gas off Torch Light a long time ago. The town didn’t let the grid go. Instead of producing our own power with a natural gas fire generator we buy our power bulk now from MEAN.” Greybull has never owned their own gird. 

Dean Eibert asked why the town stopped using the natural gas for power. He also asked if it was feasible to do it again. Duncan replied he doesn’t know why the town stopped. As far as if it is feasible to bring it back, Duncan doubted that could happen with all the new regulations. It could be very expensive and questions about how long it would last. 

Lynn Meier, town resident expressed she is hearing that the increase is coming and nothing can be done about it. “It is inevitable. This is scary for us older people on fixed income. The $15 (increase) may not sound like a lot but to us that could be getting medicine, making a trip to a doctor.” Hearing that there may be continued increases makes it worse. She also noted that this summer there was an alarm that 17 states could lose power. 

PROPERTY TAX REVENUE 

Duncan expressed that the town has spoken about the loss of revenue from the cuts in property tax. “As a town council, we’ve had numerous conversations as to what can we get rid of? What do we do to lower our costs, so we don’t have to continue to raise rates. Meier suggested a letter to the editor to explain what the 50% tax cut would do to this town alone. Duncan stated that the newspapers have had articles about the impact of the tax cuts. Meier believes a letter would have more impact. 

Councilwoman Linda Weeks noted that a there is a property tax forum at the town hall, on Oct. 5 at 6 p.m. She invited the public to come and ask questions about what happens if Prop 1 (50% cut in residential property taxes) passes. 

Duncan addressing the audience stated that every resident needs to ask themselves what services they are willing to lose.  Should garbage pick-up be once a month instead of once a week? Do they want the streetlights turned off at 10 p.m.?  Do they want to lose the asphalt streets the town currently has? Those are the serious questions that need to be asked. “It is extremely disheartening when you have to start doing these things because it effects every person in the community.”

OPTIONS  

The town could defer the increase for a year but that is not a permanent fix. It would make things worse in the long run for the community. Duncan noted that the town did have a few power bumps this summer. None of them lasted more than 10-15 minutes. 

The town’s electric grid is twice what it was ten years ago. It is so much better. The town continues to make improvements. 

“I don’t have the answers. In my life and at my age my answers are going to be different than yours. I’m willing to do without a few other things but that isn’t going to look the same for you.” He added that the council members and he are going to differ on what they are willing to do without. 

He continued, “The sewer system in Basin has been failing for so long. Our accountant in the past worked very hard in keeping costs low. We weren’t able to fund those repairs properly, in a timely manner. I don’t blame them. But bottom line is that if you don’t change the oil in your pickup, how long is it going to last? If you don’t change the lightbulbs in your house, how long is it going to be until your whole house is dark. 

The contract for the town to purchase power from MEAN was set up years ago. “We can change who we buy bulk power from, but it is a 25year process. If we give them notice that we want to purchase power from somewhere else, it is going to take five years for that to start. Then it is 20 years before we can actually contract with another company to buy bulk power from them.” 

Three years ago, the town didn’t even have an option to do so. The council determined that every contract should have a close date. They worked with MEAN to get a close date. That date was not the one the town wanted. He explained that most of the companies purchase bulk power on something like the future’s market, they reserve future power that is being produced. This is why a contract takes so long to get out of. 

During the time the town attempts to get out of the contract, it will lose its status as a “preferred customer”. The rates will increase drastically. 

Christie Christopherson, who is a resident, asked if there was an option to sell the town’s power grid. Duncan replied that option has been explored.  He expounded that every time they have explored it the answer has been. They would take it over but will not pay the town for it. Two power companies have given that same answer. One company told the town that the electric infrastructure in town is so old it would cost the company it would cost them a lot of money to bring it up to standard. That is why they wouldn’t pay the town for it. Duncan noted later in the meeting that in the last five years the town has put in a new transformer, separated services, changed out aging poles…so that it is up to standard. 

This would result in the town giving away infrastructure that creates a revenue stream for the town. Just like the water, sewer, raw water, and mosquito control makes money for the town. Those are enterprise funds. They don’t generate a great amount of money, but they do make some. Some of that money goes into reserves. 

“Each year the accountant tells us we aren’t putting away enough in reserves and that we aren’t charging enough. Every year we say we are not going to do a 3-4 percent increase every year.” 

Solar panels are permitted to be in town should homeowners want to explore that option. 

In the regular meeting following the special meeting, the council approved the second reading of Ordinance 721-Electric Rates.