Feb 29, 2008

The Board of Ava Aldermen spent most of their meeting time Tuesday evening learning more about possible options to avert the imminent Sho-Me Power rate increase, a rate which is forecast to impact this community by raising power costs 70-90 percent. The increase targets the foundation of this community, it's industrial base, and unfortunately, the new rate formula goes into effect April 1 –– only 32 days from now. In an effort to bring council up to date on the issue, Administrative Director Peggy Porter gave an overview of recent meetings city administrators have attended over the past two weeks in pursuit of possible options for addressing the rate increase being imposed on the City of Ava by Sho-Me Power Corp. Porter reported the City of Ava continues to maintain alliance with the other municipalities in the area effected by the increase. City officials also continue to discuss the situation with professionals from other municipal groups, utility commissions and associations that may be able to provide insight, or offer reasonable solutions to the situation. Porter noted several local municipalities were operating as one in consensus against the increase, however, the group remains in the formulating stage, a direction has not yet been determined. Peggy said a group met with Sho-Me representatives Monday, Feb. 18, at the Sho-Me office in Marshfield. The meeting was well attended with representatives from the City of Ava, Senator Dan Clemens, State Representative Van Kelly, Copeland, community members and other municipalities. The meeting was a non-productive session, Porter said, as Sho-Me was staunch in their position and unwilling to negotiate. Porter noted Steve Grant with KY3 was scheduled to run a story on the Sho-Me Power rate increase Thursday, Feb. 28, during the 6 p.m. newscast. She said State Representative Van Kelly was interviewed for the segment, and he did a really good job. John Grotzinger, Executive Director of Engineering and Operations with Missouri Public Utility Alliance in Columbia, appeared before council members and provided another interpretation of the rate increase, an opinion which projected the increase to be 90 percent for the City of Ava. Grotzinger explained Sho-Me is not regulated by the Public Service Commission (PSC) or Federal Energy Regulatory Commission (FERC). As owners of public power, they regulate their own rates and most generally, they charge what the marketplace will support or bear. At one point in his presentation, Grotzinger commented, "It is a fact, costs in general are going up; however, the point of contention is the degree of the increase. A 90 percent increase in not an equitable rate. As a cost-based rate, how can Sho-Me justify this rate increase and this cost?" Grotzinger cited some options the city might consider in their fight against the rate increase. However, along with encouraging words, Grotzinger also said the city must keep in mind one caveat and that is the fact Sho-Me is not finished with rate increases. They have said more increases are forthcoming, and with Ava as a wholesale customer with a long term contract, that leaves the City in a difficult position. [The city's contract with Sho-Me has a payment buyout clause, and a cancellation clause which requires three-years notice.] Grotzinger proposed several options to city administrators and council members for consideration, however, he also noted he would continue to explore opportunities and other venues for relief on the issue. He said there were other suppliers who could probably offer a competitive rate and lower cost alternative; however, the question remains, whether or not the city can get out of the contract with Sho-Me Power. Associated Electric Cooperative, Inc. supplies around 99 percent of Sho-Me's power needs, and according to Grotzinger, the electric company has raised Sho-Me's rate by 25 percent, and co-ops were increased 10 - 17 percent. The Sho-Me rate increase was voted on and passed by the Sho-Me board of directors late last year in 2007. The nine-member board is comprised of one representative from each electric cooperative, most generally the representative is a co-op general manager, or a member of the co-op board. Present board members are listed as follows: Chris Hamon, White River Valley Electric Coop; John W. Greer, Webster Electric Coop; John Greenlee, Gascosage Electric Cooperative; Kenneth Miller, Laclede Electric; H.T. Dandridge, Intercounty Electric Cooperative; James Carpenter, Se-Ma-No Electric; Jerry Divin, Southwest Electric; James D. Cottrell, Crawford Electric; Dan Singletary, Howell-Oregon Electric. During closed session, council members hired attorney Brent Stewart of Stewart & Keevil, LLC, of Columbia. Stewart specializes in electric industry litigation. In other business, council took action on a zoning resolution submitted by property owners, Troy and Ann Stewart, and approved their request to change the zoning designation on their property from R2 - two family residential to B3 - general business. The property is located on the south side of town at 1300 So. Jefferson, adjacent to the forestry service. Director of Development Janice Lorrain gave a clear report on the environmental test samples taken at the Rawlings building. Lorrain said test results showed "below all risk based criteria". Mayor Leon Harris read a letter of appreciation from the owners of the Ava Taxi Service, extending their thanks to the city for support and assistance during past years. The letter stated the business was closing March 8 due to costs that continue to rise, items such as insurance, taxes and maintenance on the vehicle. Donna Watson, economic development director of the Ava Area Chamber of Commerce, gave board members an update on the chamber's new direction and ideas. Watson, who has been with the Chamber approximately one month noted the organization is changing it's focus and looking to support area businesses and attract new growth to the area. Pam Raby, coordinator of the Ava Adult Education and Literacy Center in Ava, spoke to city council members about the GED place and her need to write a grant to continue program offerings here in Ava. Raby asked the city to assist her in writing the grant application. Raby said she had already approached the Ava R-1 School Board for assistance, but would also need city support to keep the program operating in Ava. Raby explained West Plains R-7 is no longer interested in administering the Ava site as a full-time operation but the need has been established for a full-time program in this area. Mayor Harris and Lorrain asked Raby to provide information, and a copy of the last grant application, and they would take a look at the information to see if it was possible to accomplish the task by the March 31 deadline. The next session of city council is Tuesday, March 11, 6:30 at Ava City Hall.