Dive Brief:
- Next month voters in Columbia, Mo., will decide whether to authorize the city's utility to borrow more than $63 million to pay for projects throughout the electric service territory.
- Columbia Water & Light estimates that if the bond issue passes, electric customers will see a total 6% increase over a five year period.
- If the bond issue does not pass, the city warned that more dramatic rate increases will be needed to cover the costs of the projects.
Dive Insight:
Electric customers in Columbia, Mo., will either have to vote for a $63.1 million bond or face even larger rate increases almost immediately, The Missourian reports.
Historically voters are asked to approve bond financing every five years, the utility notes in a web page about the vote. The last election when bond funding was requested for electric system upgrades was in 2006 for $60 million.
If the bond issue passes, electric customers will see a total 6% increase over a five year period: 3% in 2015, 2% in 2017 and 1% in 2018. Taxes will not be impacted by this bond initiative. If the bond issue does not pass, "more dramatic rate increases will be needed to cover the costs of the projects. It is estimated that the increases will need to be 20% to 25% with some reductions possible in five years," the utility said.
Transmission and substation projects make up the bulk of the expense, totaling more than $36 million. Infrastructure replacement and upgrades add another $10 million. The total for projects is $58 million, with a $2 million contingency fund and additional funds for reserve requirements.