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Friday, November 12, 2010

Madison Hiking Utility Rates: Local Power, Anyone?

Tuesday's MDL reports the Madison City Commission plans to raise my neighbors' rates for electricity, water, and garbage. on electricity, the city says, Don't blame us!

Ericsson described the municipal electric utility as only a "distributor of power" and not a producer. He said that the city had to increase its rates partly due to the increased cost of electricity that Madison was billed from its suppliers -- the Western Area Power Administration and Heartland Consumers Power District.

According to Ericsson, the city electric utility wasn't itself generating many new expenses and thereby creating bills that needed payment.

"We're buying some capital things, but not a lot of things," Ericsson said [Chuck Clement, "City Moves on Utility Rate Hikes," Madison Daily Leader, 2010.11.09].

Come now, Commissioner Ericsson. How can you blame Russell Olson and all the nice people at Heartland? Instead of shifting blame, the city could Power Forward™ with some local energy production, if it would just listen to its creative neighbors and local entrepreneurs.

Meanwhile, just how much will electricity bills rise in Madison?

In 2010, city electricity customers would pay about $105 per month for 1,200 kilowatt-hours of electrical power. With the rate increase, customers will pay about $114 for the same 1,200 kwh, an increase of $9 per month [Clement, 2010.11.09].

Quick comparison: Here at Madville Times World Headquarters, safely removed from the city limits of Madison on the western shore of freedom-loving Lake Herman, my family used an average of 1431 kilowatt-hours per month over the past year (minimum: 566 kWh from mid-September to mid-October of this year; maximum 3765 kWh during the December 2009–January 2010 billing cycle, including that cold Christmas blizzard). That's includes our heat, which is all electric. Average monthly bill with Sioux Valley Energy: $93.

More electricity, less cost. Ah, country living....

Water is cheaper in town, since the city has its own wells, while we Lake Herman denizens have our water piped in from Chester (or De Smet?) and support a network of 2200 miles of pipe. Hmm... have your own source, pay less... is that another argument for Madison to develop its own local power sources, or maybe even get gung ho like the Army and set a goal of energy self-sufficiency?
Update 2010.11.13 08:30 CST: General Manager Mike McDowell writes from Heartland Consumer Power District's new multi-million-dollar headquarters that Madison's increased electrical rates aren't Heartland's fault, either.


  1. My concern is the effect on economic development from several fronts. A few short years ago, Madison's municipal electric rates were half of Sioux Valley Energy, but it appears we have exceeded their rates now and the City continues to increase our taxes (electric rates) annually without considering trimming the budget. That has an effect on businesses and industry who may be considering Madison. Commercial utility rates are stronger than residential rates along with higher water and sewer rates, meter costs, etc. One wonders about the effect of these rate increases on our elderly who have had no Social Security increase for two years, or those who are considering retiring to Madison. It is easy to wave the wand of "raise the rates again" rather than consider the potential for locally-produced electricity. How about our million dollar electric generator on Madison's south side? Are we generating income from that or does it ever run? At some point, we will reach the point of no return where businesses stop looking at Madison because of its excessive commercial electric rates and retirees stop considering Madison as their retirement home. We may have reached it already. As a community, we need leadership in accepting and adopting new technology in energy production.

  2. We might also need HCPD to eat more of the cost of its fancy new building at the gates of Madison (not to mention the salary it pays its economic development director/chief Senate lobbyist) instead of passing those costs on to Madison's electricity users.

    Or y'all could just move out here to Lake Herman.

  3. FYI: Looks to me like we are still on the low end of rates. Madison charges 8.75 cents per kilowatt and will go to 9.50 (my math from the MDL article). The chart referenced below shows SD has an average of 9.85 residential which is on the low end nationally. MDL didn't give the industrial rate but the chart shows SD has low average rates.



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