Preliminary financial statements show Independence Power and Light essentially broke even for the fiscal year ending June 30, according to financial statements.

That compares to $8.8 million of income over expenses for the prior year.

The city-owned utility had total revenues of $124.2 million less operating expenses of $115.9 million for the fiscal year ending June 30th. After $12.3 million in city utility taxes were transferred the city, IPL showed a preliminary loss of $367,500 for the year.

The preliminary figures are subject to adjustments over the next several months.

It was an out-of-the ordinary year.

The City Council approved a 6% rate reduction - reducing revenue - and suspended utility shutoffs for non-payment and late fees when the COVID19 pandemic started.

The economic downturn has also impacted energy demand as many business closed or reduced operations since mid-March.

Total revenues were 91% of the original 2019-20 budget.

A highly detailed critical performance audit of Independence Power and Light was publicly released Friday after being reviewed by the City Council Audit and Finance Committee.

The audit looked at the efficiency and effectiveness of the city-owned utility and was done by city management analyst Mark Thoma-Perry.

The 40-page performance audit made 15 specific recommendations which fell into five broad categories:

• The timekeeping and payroll practices, particularly within the IPL Transmission and Distribution division

• Cost-saving opportunities within Transmission and Distribution operations

• The labor/management relationship which limit some opportunities

• Potential to save money on the operation of the combustion turbine units through staff reductions

• Equipment failures and decay which contribute to electric outages

The City Council has approved $2.25 million in utility assistance to help those with past due bills on city-owned utilities.

Funding will come for the city's allocation of the 2020 federal Coronavirus Aid, Relief, and Economic Security (CARES) Act funds received by Jackson County.

Utility assistance is the largest item in the city's $6.9 million CARES spending plan. Other items include $2.1 million for public health, $1.5 million for COVID19 paid sick and family medical leave and about $1 million for public COVID19 testing.

The city's CARES spending plan was approved. Aug. 3.

A set of seven major initiatives and work plan for IPL are being set out by city staff and garnering support of the City Council and the Public Utilities Advisory Board.

The list is intended to bring some organizational - if not political focus - on the priority projects for the city-owned utility should be over the next several years.

The priorities - laid out in a Jan. 13th memo by Assistant City Manager Adam Norris - represent an ambitious set of initiatives, potential new projects and organizational challenges.

City Manager Zach Walker decided late in 2019 to seek an outside firm to provide day-to-day management for IPL for a period that could last 18 months or more.

Three firms were short listed on Dec. 20 for additional interviews.

In the meantime, Walker appointed Jim Nail to serve as acting assistant general manager. Nail is a 12-year IPL employee who most recently was IPL's Reliability Compliance Coordinator. He is a graduate of the US Naval Academy and served as a nuclear submarine officer. 

IPL made $8.8 million net income - revenue minuses expenses - for the year ending June 30th.

This was an exceptionally strong financial performance given the budget had projected a $1.5 million loss. The outcome was achieved by significantly lower operating expenses. See IPL year end financial statement.

The financial performance reflect the recent IPL rate reductions that went into effect this year.

The financials for IPL and the other utilities were shared during a recent PUAB meeting. It has been sometime since financial statements had been provided to the advisory group.

The other city enterprise operations - water and water pollution control - also did well financially. Water had net income of $5.9 million on annual revenue of $32.3 million. Water Pollution Control had net income of $1.6 million on annual revenues of $30.1 million.

There is active and growing interest in exploring utilizing IPL-installed dark fiber to provide residential and commercial broadband services.

This would be an ambitious undertaking but has some City Council and Chamber of Commerce support. A leadership exchange team involving the mayor and others visited Ft. Collins, CO which has developed a municipally-owned and operated broadband internet service.

The city of Liberty is installing Advanced Metering Infrastructure (AMI) - sometimes called smart meters - for its city-operated water service and expect to have installation completed this year.

Liberty has approximately 10,500 residential and commercial water meters.

The city of Independence consideration of AMI includes the installation of smart meters for the city’s water customers - a consideration often overlooked as the controversy has tended to focus on Independence Power and Light.

The city of Independence’s AMI consultant, in its 2015 report, noted:

“The water utility industry is now leveraging developments used by peers in the electric utilities for communications, billing, cybersecurity, data privacy, and smart grid, and adapting them for applications such as theft detection and leak detection. Furthermore, data derived by AMI can be integrated into hydraulic models to augment leak detection, enhance the system design, and inform capital investments in the water distribution system.” 

In addition to Liberty, the city of Sugar Creek is also involved in an AMI water meter project this year.

A version of a “smart meter” is already extensively deployed in Independence by Spire - the natural gas company which serves Independence.

Here’s a description of the meter from their website.

“An Automated Meter Reading (AMR) device, which is installed on most gas meters, reads your meter. Spire automatically receives regular readings of your gas usage from the AMR device. This is the safest, most efficient way to measure the amount of gas used. In some service areas, our technicians manually collect readings each month.”

Here’s a more detailed explanation from Lowell Krofft who lives in Independence and knowledgeable about technology behind the proposed “smart meters” - also known as Advanced Metering Infrastructure (AMI) which would be utilized if the city proceeds with new electric and separate water meters for the city-owned utilities.

n 2017, Spire purchased the meters - which it had been leasing - for $16.6 million. Spire’s decision to purchase the existing meters saved customers about $1 million annually and also significantly reduced its meter reading costs.

PSC filings indicate Spire will be replacing the existing meters with a new system in 2020 and have the project completed by 2024.

The Kansas Corporation Commission, which regulates utilities, ruled that the investor-owned Westar and KCPL did not have to provide opt opportunities for customers opposed to "smart meters" or Advanced Meter Infrastructure (AMI).

This was an issue in the recent Independence debate which was settled when a 5-2 council majority voted not to proceed with AMI. 

The Kansas regulatory ruling noted that only 5 out of 473,976 KCPL customers actually utilizing its opt out provision.

The ruling since it "found no health, safety, or privacy risks or legitimate threats faced from the use of AMI meters, it makes little sense to mandate that Kansas public utilities create a new program for such a small subset of customers."

Low-income residents are energy-burden spending large share of their available incomes spent on energy bills.

The high energy bills may be due to lack of weatherization, older inefficient utilities or older houses constructed before improved building codes.

One market-based approach was shared during a recent Indy Energy forum by Philip Fracica with Renew Mo.

This particular program is Pay As You Save® ("PAYS®") which allows utilities to invest in energy efficiency upgrades on the customer side of the meter and assure immediate net savings to the customer.  (See the video).

Energy-saving upgrades are installed in a customer's home or building, but the utility pays the up-front cost of the installed energy-saving measures.  To recover its costs, the utility puts a fixed charge on the customer's electric bill that is significantly less than the estimated energy savings from the upgrades. 

The customer sees immediate net annual savings by incurring less expense for energy while paying a fixed charge that is below the total estimated energy savings.

Independence Power & Light employees accounted for 71 of the city's highest 100 paid employees in 2018, based on gross pay.

The figure is based on an annual analysis of the Top 100 city salaries which has been done by IndyEnergy the past three years. The 2018 top salary distribution was similar to that in 2017 and 2016.

The highest paid city employee earned $232,727 - $127,105 in base salary and $105,622 in overtime and worked for IPL. The City Manager was the second highest paid employee earning $218,292.

Here’s a copy of the full list showing city department, job, base salary, overtime and gross. Individual names have been omitted.

The city has issues a proposals for green energy initiatives and perhaps some additional projects for the community solar farm at the former Rockwood golf courses.

Details of the potential projects are outlined in a city Request for Proposal which was issued Oct. 18th.

The proposals asks for energy conservation measures for various city facilities through updating “outdated and obsolete building & equipment” with the idea to reduce annual utility costs. Potential city buildings listed include fire stations, city hall and other city-owned and operated buildings.

It also requests proposals for solar power at the Courtney Bend Water Treatment Plant and ancillary solar facilities adjacent to the Rockwood community solar farm.

The seven-member Public Utility Advisory Board continues to examine cost issues and finances for Independence Power and Light.

It recently received a general five-year overview of the city-owned electric utilities revenues and costs (2014-19).

The report shows IPL has $48.5 million in unrestricted cash reserves.

Utility finances are complicated because revenue varies considerably based on the weather and there are large capital expenditures to fund. 

The City Council approved a two-year contract extension with Strategic Capitol Consulting to lobby on behalf of Independence Power and Light at the state capitol in Jefferson City.

The proposed contract increases the contract from the current $66,000 per year to $120,000 per year, or $10,000 a month. The current contract expires Oct. 30th.

The lobbying firm is lead by Steve Tilley, a well-connected lobbyist and former Speaker of the House of Representatives. IPL previously did not have its own lobbyist, but stated it needed assistance on major utility issues.

The firm has provided regular reports to the City Council on its lobbying efforts.

The City Council also approved a separate lobbying contract with John Bardgett & Associates which also will be paid $120,000 - an increase from $90,000 under its current contract which expires Aug. 31.

Independence Power and Light (IPL) is considering adding another three community solar farms in an aggressive expansion to increase renewable energy through solar.

The plans are outlined in a Request for Proposal (RFP) which the city issued in May with a potential City Council decision in mid-July.

The RFP follows a resolution adopted by the City Council in April "to advertise a request for proposals for projects supporting energy efficiency and the development of renewable energy sources."

The RPF outlines plans for two community solar farms within the city limits and participation in a third "off-system" community solar farm.