Item Coversheet
City of Independence

Agenda Title:

IPL Rate Comparison Study
Executive Summary:

A Rate Comparison Study was conducted to analyze Independence's electric utility rates compared to similar utilities in a 200 mile radius.  The study looked at the total amount of energy sold and the total revenue to determine the overall cost.  When analyzing the data based on the number and type of customers, the study showed that Independence has the highest percentage of residential customers of all the utilities reviewed.  As a class, residential accounts consume less energy than commercial or industrial accounts.  The study's conclusion is that the lack of commercial and industrial accounts and the volume they would consume are primary drivers for the higher rates in Independence.
Previous Activity:

This was presented to the Public Utilities Advisory Board on August 19, 2021. 

The last electric utility rate increase in Independence was in 2012 and the Council directed a 6% rate reduction in 2020.  In spite of that, Independence continually faces a public perception of unreasonably high utility costs compared to other municipal utilities.  A Rate Comparison Study was requested by IPL Staff in order to examine the differences between Independence rates and those of other utilities.  The study methodology compared data for similar sized utilities within a 200 mile radius.  Data was collected to compare revenue, energy sold, and the number and type of accounts being served in order to evaluate each utility on the same terms.  The comparison showed that while Independence has the highest unit cost, it is largely driven by the fact that Independence has the highest percentage of residential customers which consume less energy per account.  The utilities with the lowest cost also had the highest percentages of commercial and industrial accounts.
Department:          Contact Person:          Jim Nail

Power and Light DepartmentApproved
City Clerk DepartmentApproved
City Managers OfficeApproved
City Clerk DepartmentApproved

Council Action:          Council Action:         

IPL Rate Comparison Study PresentationPresentation
IPL Rate Comparison Study - reportBackup Material