Star-Journbal Editor
Faced with the reality that it was about to lose its contract with the City of Hillsboro, Westar Energy sent a representative to the city council this past week to say the utility giant was prepared to cut up to $350,000 from its original bid to provide electrical power to the city.
"Thanks, but no thanks," said the council, which voted instead to begin buying juice from the Kansas Power Pool June 1.
The last-ditch effort by Westar at the council meeting March 13, proved to Mayor Delores Dalke that Hillsboro would be better off with the kind of clout the Kansas Power Pool provides.
"Ever since we started with the pool of cities which are looking to purchase electricity at the best rates possible, the [Westar] rates have been coming down the whole time," Dalke said. "Every time there was a meeting of the pool, Westar would offer us better rates.
"I think we've dodged a bullet here, but we couldn't have done it on our own. If Hillsboro would have tried to negotiate with Westar we wouldn't have had any negotiating room.
"I believe in competition," she added.
The mayor said Monday it was too early to tell what the new purchasing power would mean to rates charged by the city to local residents and businesses.
"We'll have to look at that before I can answer if the local rates you will be paying will go up or down," she said.
"If we would have gone with [Westar's] first proposal we would have had to have a sizable jump. But at this point we haven't had time to put those numbers together.
"It has to be done in the next few weeks, because our contract changes June 1."
The terms of Westar's original renewal contract would have increased the city's cost for bulk electricity by about $350,000 per year. Westar also expected the city to sign a 20-year contract, with no limits to future rate increases.
In response, the council asked energy consultant Scott Shreve to find other sources for bulk electricity. After receiving bids from four companies, Shreve said the best way for the city to negotiate with Westar was to take advantage of the purchasing clout of the Kansas Power Pool.
Kansas Power Pool began when a group of cities facing similar increases from Westar formed an alliance to make bulk purchases of power to meet electrical demands.
About 35 towns and cities across the state joined the pool, including Augusta, Burlington, Chanute, Kingman, Russell, Wellington, and Winfield.
And now, Hillsboro.
The city still will use some of Westar's electricity, but at rates negotiated between Westar and the pool. The pool leveraged its best deal with Westar against other suppliers of electricity from Oklahoma, Nebraska, and Missouri. Regardless of which company generates the power, Westar will be paid a transport fee because it still owns the power lines.
"So without [the pool], yes, we would have paid those higher prices," Dalke said. "I'm just very, very thankful that we had the foresight to join the pool. We're one of the smaller [members]; we're talking about cities with five times more population than ours.
"Sometimes people don't listen to one cry out there in the wilderness," the mayor added. "But when there's a choir instead of one person, you hear them better."
In other business,
[pick up councilcontinued]
