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Friday, Aug. 26, 2016

PILOT: Opposed

Sunday, February 2, 2003

I am opposed to the proposed PILOT which amounts to 3 percent of all electric revenues of the Board of Municipal Utilities. This amounts to $1.6 million per year. The net income from electric this past year was $518,000.

For the BMU to pay $1.6 million to the city will require a rate increase to every customer of BMU. Electric revenues come from customers in Sikeston and contract cities such as Columbia, Carthage, Fulton, West Plains and Trenton and from spot sales of excess energy. The contract cities pay cost plus 10 percent. Cost is defined as fuel, operation and maintenance and bond payments. It cannot now include and extra 3 percent PILOT. All of these cities have stated they will not pay the 3 percent PILOT. Spot sales are at market prices and you can't add 3 percent to spot sales. The only place to get the $1.6 million PILOT is from retail sales to the citizens of Sikeston by increasing rates by 10- to 12 percent. I don't believe a 10- to 12 percent increase in our citizens' electric bills is justified.

BMU presently provides electric, water and sewer services to the city, parks, street lights, fire hydrants of about $430,000 each year. That is almost exactly 3 percent of retail electric sales of $14 million per year.

A strong viable BMU is essential to every citizen. Reserves to make repairs and replacements to a 21-year-old power plant are essential. BMU depends upon sales to the contract cities and others for $42 million of the total electric revenues of $56 million. BMU cannot risk losing wholesale customers which would bankrupt your electric system. Engaging in lawsuits with wholesale customers will adversely impact our present wholesale customers and spot sales. That is not the way to encourage those sales, which are essential. It is the path to disaster.

For these reasons, I strongly urge every voter to vote NO on the PILOT proposal at the election on Feb. 4

Manuel Drumm