Murray City Power boss quits ahead of expected rate increaseMay 08, 2023 12:09PM ● By Shaun Delliskave
Murray City Power lineman works to restore electricity on Winchester Street. (Photo courtesy of Murray City)
Former General Manager of Murray City Power Blaine Haacke has resigned after 16 years of service to the city. Murray City announced that Murray City Power’s former Assistant General Manager, Greg Bellon, who has over 30 years of experience in the public power industry, has been appointed as the Interim General Manager.
“The city values the leadership and knowledge that Blaine Haacke provided to Murray. The city will miss his contribution. However, because of the department’s succession planning, his departure will not affect the quality of power services that Murray citizens have come to expect,” Murray City Chief Communications Officer Tammy Kikuchi said.
Haacke’s resignation came when the city announced, as early as December, that city power rates could substantially increase. In January, Murray City Chief Administrative Officer Doug Hill told the Murray Journal, “Power might actually be probably one of the biggest issues that our citizens will be impacted by next year. We may have to go out and buy power on the market, pay higher rates for what we currently do with our existing resources.”
According to Hill, Glen Canyon Dam’s ability to generate hydroelectricity for the city was in doubt due to the falling lake levels of Lake Powell. The Colorado River Basin’s record level of winter precipitation might prevent that from being an issue unless the spring and summer end up dryer than average. He also indicated that other market forces were impacting Murray City Power.
“The biggest question right now that we have for 2023 is what’s going to happen with energy… there are a lot of different forces in play right now with power,” Hill said. “I mean, coal is hard to come by. People don’t like it. Some of the resources we have, like the coal-powered Hunter (Power) Plant, come with questions about how long that plant will be open. Right now, you can’t get coal because one of the big coal mines in Utah is on fire....We have the IPP plant, and they’re converting to natural gas, but California is taking much of that power.”
The city did not elaborate if the issue of power rates were the cause for Haacke’s sudden departure.
“Murray purchases wholesale power through contracts with other power generating plants. Over the winter months, the cost to purchase wholesale power increased dramatically. The increases are primarily due to higher natural gas costs, the drought affecting the Colorado River power generation, and curtailments of coal plants because of supply chain issues. Purchased power costs exceeded Murray City’s budget by over $7 million between December and March. Fortunately, the city has healthy reserves to absorb these increases. The city expects future costs to stabilize but still remain high. Consequently, the city has hired an industry consultant to conduct a rate study and recommend future rate increases,” Kikuchi said.
Specifically, the consultant will consider operating costs, capital improvement needs, market costs, conservation measures, system impacts and costs, and other regional trends and emerging markets.
To offset the need for power rate hikes, the city is exploring other opportunities to purchase sustainable power, reduce operating expenses and delay projects. The city is also balancing the need for affordable power rates with the need to maintain and improve infrastructure and services provided by Murray City Power by having an up-to-date rate structure, a sufficient reserve fund, and a master plan and capital improvement fund to plan for the future.
Rocky Mountain Power, which serves eastside Murray residents, has not announced any rate increase yet. However, Idaho and Wyoming customers have already learned to expect as much as a 21.6% increase in rates.
Murray City Power will not announce its rates until its study is completed. The city council will also hold a public hearing in conjunction with any proposed rate increase. λ