The Eudora City Commission was presented an electrical rate study Monday that would increase the monthly rates in line with the 3 percent hike built into the city’s 2018 budget.

The commission first approved the city’s $16.85 million 2018 budget, which maintains the 39.501 mill levy of the current year. At that rate, the city of Eudora’s share of taxes on a $150,000 home would be $681.

The budget includes increases to Eudora utility rates of 5 percent for water, 3 percent for electrical and wastewater, and an increase in the monthly stormwater fee from $2.25 to $3.25, City Manager Barack Matite said.

The electrical rate study was presented to commissioners after they approved the budget at the start of the meeting. The study, presented by Don Gruenemeyer, consultant with Sawvel and Associates, proposed rates based on the cost of delivering service, which were broken down in the report.

Gruenemeyer said he found the city was not charging enough to recover its fixed cost of owning a distribution system. Those expenses include employee costs, as well as the costs of maintaining and improving its distribution system, he said. On the other hand, he found the city was overcharging for the cost of buying energy, the added price of power during peak demand periods and the cost of transmitting electricity to the city.

After breaking down those costs, Gruenemeyer proposed the city establish a 2018 rate structure that would charge residential customers a $13.25 monthly fee to cover fixed costs and an energy fee of 11.3 cents per kilowatt hour. Both of those fees were less than what Westar and KCP & L currently charge customers in the Eudora area, he said.

At that rate, a typical residential customer consuming 827 kilowatt hours in a month would have a 2018 bill of $107.11, he said. The customer’s bill for the same usage this year would be $103.65 for the month.

Gruenemeyer also proposed classifications for commercial, industrial and security lighting customers.

Matite told commissioners the increase Gruenemeyer proposed in the study was built into the 2018 budget they approved.

A cost of service report was the first step needed for the city to develop rates for those producing their own power through solar panels, Gruenemeyer said. The other step needed was the adoption of standards for the installation of solar panels and their connection to the city’s electrical system, he said.

Residential or commercial solar power producers would decrease city revenue and could put a bigger burden on those who depend on the city for electricity, Gruenemeyer said. To protect the city, he proposed rate options that would allow solar panel owners to realize savings on their bills associated with the purchase and transmission of energy, but not those associated with the city electrical utility’s fixed costs.

Mayor Tim Reazin apologized to residents attending the meeting who were installing or exploring adding solar panels for the city’s delay in adopting solar energy standards and rates. He said his interest was in protecting the city while allowing those who install solar panels to enjoy enough savings to make their investment pay off.

Patrick Carter, who was among four residents encouraging the commission to make progress on the issue, said he was installing solar panels to the home he was building in the city. He criticized Gruenemeyer’s analysis because he said it didn’t consider the excess power his solar panels would generate, which would be back to the city at a cheaper rate than what the city purchases from KCP & L.

The commission will consider the solar panel issues again at its Aug. 28 meeting. Gruenemeyer said he would return with additional rate options for solar power customers.