Can the city change to a cheaper power source?
The city’s public works authority is in a 15-year contract with the Oklahoma Municipal Power Authority to purchase its wholesale electricity. OMPA serves 42 municipally owned electric systems, reaching approximately 250,000 Oklahoma residents. A consumer-owned public power entity, OMPA is owned by the member cities it serves. The Watonga city manager is on the board of directors for OMPA.
Can the city purchase power from another, cheaper source?
Outside of the consideration of its 15-year contract, it is possible, but options are limited. Watonga is a part owner of OMPA, similar to a cooperative and to leave that cooperative would eliminate the advantages membership offers.
And according to Jeff Hyatt of Cimarron Electric, that company is currently unable to provide power directly to the city for resale to its subscribers. It simply does not have the generation capacity. It is possible in the future, but not in the present. As the area grows and demand increases for utility services, the options will increase, but whether the advantages to a change outweigh the benefits of membership in OMPA remains to be seen.
Oklahoma Statute allows the city public works authority, as a public trust, to incur long term debt and enter longer contracts than the city can obligate itself for.
According to Jennifer Rogers with OMPA, the city pays for the electricity from its utility revenues, not its tax collections.
Since a municipality cannot collect property taxes for day-to-day operations, it is accepted practice for a town to use the revenue from its electric utility to fund city operations like fire departments and employee salaries.
It is important to note that the city would use this method of income generation no matter where it purchased its power. Otherwise, there would be very limited funds on which to operate the city. In order to be sustainable, the city must sell the power at a higher rate than its purchase cost.
In keeping with Oklahoma’s ‘all the above’ approach to power, OMPA generates its own power at Kaw Lake dam hydroelectric plant, the Ponca City plant powered by natural gas, a New Castle natural gas plant, the Luther plant, is also natural gas powered, and OMPA co-owns an east Texas plant coal powered it shares with Southwest Electric and Great Plains in northern Oklahoma is a wind powered plant. OMPA also shares the Grand River Dam coal fired plant. It also uses power from a wind farm near El Reno and another near Woodward, and a coal powered plant in Fulton, Arkansas. There are other cutting edge technologies used to generate electricity, like the landfill- gas- to- energy project in Sand Springs and a solar farm that just came online in Kiowa County.
What does OMPA charge the city per kWh?
Well, that depends. It varies from month to month depending on usage demand and is based on the variation from peak demand. The more consistent the demand and usage the lower the price per kilowatt.
The rates fluctuate some due to those variable costs, but the average price per kilowatt to the city for the last year has been .0629.
This is the cost for the power when it arrives in town, much like the cost for gasoline when it is unloaded at the station.
There are costs associated with getting that fuel – whether gasoline, diesel or electricity -- to the consumer. Just as the gas station must pay for its pumps, licenses and facilities, so the city must consider the lines, poles, transformers and other equipment to deliver the electricity to homes. Also taken into account are also non-metered city facilities and line loss, electricity that inexplicably disappears as it is transmitted and distributed through the lines from place to place.
The average cost per kilowatt hour charged to residents in Watonga during the 12 months from July 2022 to July 2023 was 0.1388.
Subtracting what the city pays per kilowatt from what it is charged per kilowatt results in a .0759 yield. When factored out using this reporter’s own electric usage, 1013 kilowatts in September, that figures out to be $76.88.
This is for an 1,100 sq. ft. all-electric home.
Where does the money go? What does it pay for?
There are costs associated with the electricity outside of the purchase price from OMPA. Those include employee payroll and benefits, line maintenance payments to OMPA, electric system repairs as well as testing and supplies.
Like any other department, there are indirect costs to light and water, costs like administration – the clerk who creates the payroll checks for the department is also an employee with associated costs – professional fees and insurance that includes liability.
The numbers here come from the 2022-23 budget to correlate with the utility costs referenced. The public works authority transferred some $1,590,000 to the city’s general fund during the year. This is above paying its own costs, as those must be met first.
The general fund sent $60,000 to the general government fund, $40,000 to the library, and $44,000 to the parks department, in addition to $1.4 million budgeted to other departments and uses. Those figures are readily available on the city’s website where its budget is posted annually.
The money helped pay salaries such as fire fighters and law enforcement. It is used to keep the splash pad running at Huff Lorang Park as well as keeping the other city parks mowed and maintained. It funded maintenance and operations, which include expenses like copiers and lawn mowers.
How can residents reduce their power bills?
The obvious steps can be taken, such as regulating the thermostat setting in your home, using thermal drapes that exclude intense sunlight and heat in the summer and help maintain the interior warmth in the winter. Keeping the doors closed or closing off unused areas of the home may help as well.
Beyond that, a resident can request a free energy audit that will point out where their home wastes electricity. It could be lack of insulation, poorly fitted windows or doors, obsolete appliances or other culprits such as heat or air conditioning escaping through the outlet covers in a room.
To ask for an energy audit, go to https://www.ompa.com/about/residential-energy-audit/.
There are also rebate programs for installation of energy efficient heat pumps and hot water tanks. The rebates are through the Public Trust Authority, not the City of Watonga General Fund.
The city website also lists contact information for LiHEAP, which provides energy assistance for low income residents, the Salvation Army, the Cheyenne and Arapaho Hope and Elder Care programs and Oklahoma Heartline. These agencies and programs may be able to assist with energy costs.
Commercial ventures – businesses with high energy demands – can enter the demand and energy efficiency program that offers rebates for projects that reduce the use of electricity during peak residential usage periods, such as late afternoons in August.