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Sunday, May 1, 2016

Monett signs Empire contract

Wednesday, May 25, 2011

(Photo)
Concluding 14 months of negotiations, the City of Monett and Empire District Electric Company agreed to a new 10-year contract for the purchase of wholesale electricity. A delegation from Empire attended the city council meeting on Friday to finalize the arrangement. Show, from left, are: Mayor Jim Orr; Empire representatives Kelly Walters, vice president and chief operating officer for electricity; Martin Penning, vice president of commercial operations; Bill Eichman, manager of energy services; Brent Baker, director of customer service; and Monett Utilities Superintendent Pete Rauch. [Times Photo]
The Monett City Council signed a 10-year agreement with Empire District Electric Company for the purchase of wholesale electricity at the May monthly city council meeting.

Bill Eichman, manager of energy services for Empire, was on hand for the occasion, along with Martin Penning, vice president of commercial operations, Kelly Walters, vice president and chief operating officer for Empire's electric division, and Brent Baker, director of customer service.

Eichman explained negotiations started in March 2010 and had a few more steps to complete, which he described as "crossing I's and dotting T's." The process took time as the formula introduced was discussed in depth and required agreement by the city, Empire and regulators from the Federal Emergency Regulatory Commission.

During the last 20-year contract with Empire, the city saw cost jumps when rates were adjusted. The 2003 rate case addressed investments made by Empire over the previous 11 years. Subsequent investments were addressed in the new rates in addition to ongoing costs.

Rates going into effect in 2011 would jump reflecting past investments, covering the IATAN 2 coal-powered plant near Kansas City and the coal-fired Plum Point Energy Station in Osceloa, Ark. The second part of the cost for the plants would be phased in during 2012.

Eichman expected costs to level out over the following five years and even decline. After that he could not predict what prices would do.

"Increases will be based on our actual costs," Eichman said. "We have five jurisdictions reviewing our costs."

Monett Utilities Superintendent Pete Rauch said Monett's consultant would also review rate changes annually and would have 90 days to propose changes.

Empire's delegation concurred the formula arrangement was as fair a deal as could be reached.

"Empire is in this as a business," Rauch said. "We've got to do what is best as we can as far as our customer base. This is very fair to both parties."



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