Madison Debt, Utility Rates Hamstring Economic Development

My neighbor Jerry Heckenliable spoke at the Madison City Commission meeting Monday night. Neither KJAM nor the Madison Daily Leader felt his comments warranted coverage. A conversation with Mr. Heckenliable persuades me that his comments do warrant coverage.

Mr. Heckenliable spoke to the City Commission about two concerns: Madison debt limit and Madison's electric rates. He first noted that the city has $10.9 million in debt and an $11-million debt ceiling. In other words, if the city's in a pinch, it can't borrow much more money. Heckenliable says Madison's in the same fiscal boat as other local governments, whose heavy debt loads are a drag on the economy.

Perhaps dragging even more on our local economy is Mr. Heckenliable's other concern, local electric rates. For the first time since he moved here in 1961, Heckenliable is paying more for electricity than his rural neighbors. Heckenliable analyzed his electric bill from November, prior to the city's 8.6% rate increase. In November, he paid $139.65 for 1760kWh. He called Sioux Valley Electric to compare rates and found a rural resident using the same amount of power would have paid $129.03. Sioux Valley customers (like me!) can also take advantage of Sioux Valley's reduced rate for electric heat, an option not available in town. Heckenliable conservatively estimates that discount would have brought his bill down to $113.

Heckenliable's calculations fit with calculations I made back in November comparing Sioux Valley's better rates with Madison's. His concerns fit those of Mr. Goeman, who has noted online that Madison's increasing utility rates could stunt housing and commercial growth. In our conversation, Heckenliable cited the same numbers that Mr. Hess published here last week, showing Madison's mill levy on owner-occupied property at double the rate in Brookings.

Heckenliable says Commissioner Ericsson joked that they don't want Jerry to move away. Heckenliable responded quite seriously that the thought has crossed his mind.

Heckenliable challenges the contention that the electric rate increases are not power supplier Heartland CPD's fault. He says Heartland has overpurchased power from Wyoming suppliers. Heckenliable says a Heartland official he spoke with had no answer for why they can't supply power to in-town customers at a lower cost than Sioux Valley can to rural residents on a much more sparse and thus less efficient grid.

Heckenliable urged the commission to lobby its electric providers, from Heartland on up to the Western Area Power Administration, to get these rates under control. He suggested the city get on Heartland's case to find out why their power requirement studies overshot demand projections and didn't stop them from overbuying capacity. He suggested the increases from WAPA due to shortages of hydropower during recent droughts could have been avoided by establishing emergency reserves and rate stabilization funds rather than WAPA's taking out federal loans to buy temporary power, which now leaves WAPA's customers paying interest on top of current rates.

Heckenliable reports that Commissioner Ericsson said his points were well-taken. The city then moved on to other business.