NO ELECTRIC INCREASES following February ice storms
The Blackwell City Council’s meeting Thursday came with an announcement from City Manager Janet Smith, revealing that the Oklahoma Municipal Power Authority will not increase utility rates for OMPA members after February ice storms affected power supply in the region.
The OMPA provides electricity to the City of Blackwell and several other cities on Oklahoma.
“In February, there was a lot of concern that cities would feel the impact of all of the rolling blackouts and outages, and that $60 million impact would be passed onto our customers and increase rates,” Smith said. “Well, at the OMPA’s meeting, they agreed to absorb that cost, meaning it will not impact their cities and customers. It’s such a blessing.”
The board of directors for the OMPA approved at its March meeting a series of items to mitigate the financial impacts from the storm, preventing cost increases for member cities. The OMPA estimates that the storm cost the organization approximately $60 million, though the exact amount will not be known for several months, as Southwest Power Pool market resettlements occur.
The board approved a plan to spread the financial impact of the storm over a period of seven years. As a result, member utilities are not expected to see any wholesale rate increases for 2021 or 2022 as a result of storm costs. The approved plan includes using funds from the authority’s rate stabilization fund and new debt issuance that will be amortized over the course of seven years.
To offset any increase from the new debt, the authority will refinance existing bonds, taking advantage of current low interest rates providing savings, officials said. The exact amount of money to be used from existing reserve funds and new debt will be determined over the next two months as costs become more certain. “I am very pleased with the outcome of the plan developed by staff and our financial advisors,” David Osburn, OMPA’s general manager, said. “To be able to cover the extraordinary cost of the winter storm event and protect our members from cost increases is a win.” OMPA is governed by an 11-person board of directors that is made up of representatives from the cities and towns across Oklahoma that is serves.
These board members are seated by electors, and every member city or town has an elector. The authority supplies power to 42 members.
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