MOORHEAD — Moorhead City Councilwoman Heidi Durand said they are working towards being more "pro-customer" when it comes to its electric and water branch.
She said many working families sometimes have problems with their Moorhead Public Service bills and although she understands the business side, she also wants to continue to look into the "moral side."
The longtime general manager of the utility, Bill Schwandt, agrees for the most part as their goal has always been to be "efficient and economical."
In perhaps some of the most major changes in years in that new direction, the utility is eliminating or lowering a number of fees. More changes might also be ahead.
On the rate side, however, changes lie ahead and they may end up not as pretty for the estimated 13,000 customers. Because the utility is facing some major water-related projects, MPS needs to raise the water rates by 6% next year and possibly that much in each of the following four years. Major water users, such as the No. 1 customer Busch Ag Resources malting plant, aren't too happy. The good news, though, is that the more expensive part of a city utility bill — the electricity rates — are expected to stay stable with no increases for as long as possibly the next five years.
Rates haven't been finalized yet, but although less than a handful of people showed up at a rate hearing a few weeks ago, residents can still offer comments as the five-member utility commission won't make the rate decisions until its meeting on Dec. 18, according to Schwandt.
However, the more "pro-customer" fee reductions are in place or will be as of Jan. 1.
One fee that was at what Schwandt thought was the root of most customer service complaints was a $165 charge if a technician had to come out for an after-hour emergency call.
He said if there's power to the meter on the home and the meter is running, it's "99% likely" the problem is in the home, which is the homeowner's responsibility.
Under the new system to eliminate that charge, similar to Cass County Electric Co-op's policy across the border, the homeowner is urged to check the meter or call their electrician or handyman to fix the problem. If it's MPS's problem, Schwandt said they will reimburse the customer for the charges.
He said the cost to send employees out after hours could be as high as $400 for one call.
In the future, he said they hope to have technology to check to see if the meter is running as there are plans to install new automated meters in the coming years.
In fee reductions planned for Jan. 1:
- The interest rate on a late fee is cut from 5% to 1%.
- Reducing the fee for "non-sufficient funds" on a check will drop from $30 to $10.
- The first time disconnection and reconnection fee of $70 if service is cut off for not paying a bill has been eliminated for the first time, although a $50 deposit is required that can be returned to the customer later. On subsequent disconnections, the fee has been cut from $70 to $30 although there will be a $100 deposit that will also be returned.
In the future, Schwandt said they are also looking into eliminating the fee when a customer uses a credit card to pay the utility bill as he said a study shows about 54% of utilities nationwide have adopted that policy.
Durand said she and MPS Commission Chairman Dave Anderson are also looking into yet another "pro-customer" program where families or others who get behind on their bills can set up a repayment plan for their bills at zero percent instead of having to go into the "pay day loan trap." She said a similar program they have looked into has a 98% success or payback rate.
"I think most people want to pay their bills," Durand said. "I'm just concerned for the working class."
Durand also noted that the City Council also recently approved a requirement that in the winter months, no utilities can be cut off.
Schwandt said he wants to urge customers, however, to not get behind in their bills as even energy assistance program leaders tell him that's the best way to keep a financial situation from ballooning out of control.
As for the economics of the need for more water department revenue and the rate hikes there, Schwandt and Durand said that there's simply the need for projects in the coming years that could be as much as $36 million.
One they have no choice in is a $7 million lime sludge dewatering plant that meets new Minnesota Pollution Control Agency requirements.
It's the sludge left over after water is treated that is currently going to ponds northeast of the city, but that won't be allowed any longer so a plant has to be built to take the water out and then the material left will be taken to the county landfill. There are some uses for the dewatered product but a financially feasible way to use or transport it hasn't been realized.
Other projects in the works are $3 million for a south side water tower, $6.4 million to replace aging water mains in the city, $6.7 million for plant and equipment upgrades or replacements and $12.7 million to replace a raw water transmission line.
With the 6% increase in 2020 in water rates, Schwandt said the average monthly water bill of $37.77 will go to $40.03 or a $2.26 increase for a month. He and Durand said that an increase on that bill is much easier to take than a 6% increase on an electric bill that averages out in the city to be $93.24 a month.
Schwandt, who started as general manager of MPS in 1993, said electric rates match Xcel Energy rates in Fargo and are lower than those charged by Cass County Electric Co-op and Xcel in Minnesota.
Plus, he points out that about 21% of the electric rate, or about $9 million a year, are transferred to the city general fund to help keep property taxes lower. In addition, when people get their monthly bill, he said they are trying to educate people that the city has several other fees on the monthly bill including for garbage, storm water, street lights, wastewater and pest and forestry.
One of the charges for "fire protection" under the MPS heading will likely be switched to the city side of the bill, although Councilwoman Shelly Dahlquist in the past has questioned why there is even such a charge as most of the infrastructure is in place.