Columbia city council approves increasing the 2022 energy budget by millions of dollars
COLUMBIA, Mo. (KMIZ)
High inflation and energy prices are affecting how much the city of Columbia spends on electricity.
This is one reason why the Columbia City Council approved increasing the 2022 energy budget by millions of dollars.
While it doesn't mean an immediate raise in electric rates for people, community members are concerned that an electric budget increase could hurt their pockets in the future.
"People are already struggling to pay their current electric bills," said a Columbia resident.
The pandemic and the war in Ukraine caused high inflation and high natural gas and energy prices, impacting the city.
The city says high energy prices, reliability concerns and weather events are leading them to ask for more than $22,000,000 more for its energy budget.
Inflation is up 9.1 percent, the largest increase since the 1980s.
"We need to do a rate adjustment or a fuel adjustment factor which is in our code and it's not been used for decades in order to be able to sustain this moving forward to avoid bankruptcy," said the city's department director, Dave Sorrell.
Zack Miller, an Economics Professor with MU, says the war in Ukraine and the pandemic are other factors causing energy prices to soar.
"The pandemic certainly caused global supply shortages which caused a supply effect to make things more expensive," Miller said. "The Russian invasion of Ukraine has caused a severe shortage in the natural gas market. Russia is a huge producer of natural gas but also crude oil production as well."
Due to this, the city of Columbia needs to increase its budget to buy power in order to keep the lights on for residents.
​​​​​​​In May of 2021 energy prices for the city stayed around $25 - $35 for the city an hour. May of 2022 showed anywhere from $85 - $149 an hour.
The heat wave also had a major impact on rising energy prices.
With more people needing power, the city has to purchase a larger supply. The current heat wave has forced transmission owners and generators to delay taking care of outages resulting in higher costs.
The city manager is asking the council to add $22,500,000 dollars to its more than $64,357,608. This would bring the total purchase power budget to $86,857,608.
The over $22,000,000 would be pulled from the electric utility's account.
