I really need your help. Really!

You may know this about me already, but I am a big believer in communication.   I appreciate all of the comments and feedback that I have received about the potential changes to our utilities.  If you are not aware, we are looking seriously at selling our gas utility to Questar Gas and selling our electric utility assets to South Utah Valley Electric Service District (SESD) and annexing in to their service district.  You probably understand this already, but this is a really big deal, and it will have a lasting impact on every one of us.

As your mayor, I want to hear what you have to say.  Before we make any decisions on this I want to accomplish two things.  First I want to make sure I communicate the reasons behind us suggesting such a significant change. I want to make sure you are informed. Secondly, I want to hear what you have to say about it.  I want to get your feedback.

On Thursday, June 19th at Frontier Middle School, we will have a town hall meeting to accomplish exactly this.  While I can write blog posts, and post on Faceboook as part of my communication efforts, I believe that looking at each other face to face is the best way to communicate.  I want to share some information with you (very briefly), then give you all a chance to ask any questions you may have.

In conclusion, your representative government is about to make a big decision which will impact you.  Before we do, I want to communicate with you and briefly inform you of the details, then I want to listen to you and answer your questions.  I am humbly requesting your presence at Frontier Middle School at 7:00 PM on Thursday June 19th.   Oh yeah, and tell your friends and neighbors too if you don’t mind.

 

Your public servant,

Mayor Pengra

18 thoughts on “I really need your help. Really!

  1. Mayor Pengra, I won’t be able to make the meeting due to recent surgery, but I wanted to ask if selling the utilities would change how we make our payments? Would we pay to those companies or continue to pay to eagle mountain city in one bill? I know that one of the mentioned utilities makes paying bills difficult as you have to use western union. Not sure which one it is, but I enjoy the convenience of one bill.

  2. Tammy, Both entities have multiple methods by which you can make payment including online bill pay. It is true however that you would have three separate bills. While I know this would be an inconvenience for people and I don’t want to make light of that impact, the reasons for looking in to the change will have far greater impact on residents in the long run. We will post video of the meeting a day or two afterwards so you can still watch it. I’m sorry you had to have surgery and I hope you recover quickly!

  3. I have another meeting on Thursday to attend.. One thing I feel will benefit all residents, and the city council as they make their final decision, would be to have some analysis done on the different scenarios we could be faced with. As it relates to both our gas and electric rates if we stay with Eagle Mountain how will that effect our rates both short and long term. Also if we join with Questar and SESD how will that effect our rates and service both short and long term. This is a big change and I would love to see an outside analyst look at these hypothetical conditions so we can feel more comfortable about whatever is decided. There could be benefits to either way we go. In the end I want the best service at the best price for the utilities I use.

  4. Also would like to know how the debt will be handled. Will we pay a different rate than other customers with the new utility companies or will that cost be shared across the board (potentially lowering our rate). Also if we pay a higher rate than their other customers (to cover the debt we have) will we see that rate go down as customers come online or at the time it is paid off. In other words, how will the debt be handled with new entities vs how Eagle Mountain plans to handle it.

  5. Bryan,

    Thank you for your comment, and I believe you made a similar comment on Facebook (come to think of it) that I may not have answered. Your suggestion, or at least your concern, lies at the core of this consideration. We will talk about this tomorrow as this is one of the primary points why we are considering this decision. The fact is that Gas and Electricity are commodities. Gas and Electricity prices on the market are increasingly tied together as coal fired power plants are retrofitted to natural gas fired power production. This only increases the volatility of the both commodities as greater pressure is placed on production and delivery systems. The ability to perform this analysis is of primary concern to me. Our analysis is relatively unsophisticated up to this point and it hasn’t needed to be for the most part. As we grow however, our hedging operation will by necessity need to become significantly more sophisticated and this will add operational expense. In contrast SESD and to a greater degree, Questar Gas already perform these functions and have greater ability to manage supply cost. The name of the game is not to “beat the market” because you really can’t when you rely upon the market to supply a commodity for physical use on a consistent long term basis. The purpose of hedging is to minimize the impact of price fluctuations on the customer by smoothing out the supply cost. There is a larger question too. Without answering your inquiry with a direct analysis of long term commodity cost (which can’t be done with any acceptable degree of accuracy) I would ask if we want our government investing resources in to this type of operation which will be run by a political body. My answer is no, I don’t believe that will provide the most advantageous long term results. Some may disagree however. This is of course only one consideration of the challenges we face. While I would argue that on its own merit, this one consideration makes a strong case for us turning over the operation to purpose driven entities, there are many other factors. The aggregate of all factors is what makes the argument so compelling to me that we should move forward with the transactions. If you want to talk in person about the technical aspects of these issues, I’m happy to take your call though. My number is 801-564-9342.

    • Thanks for the insight. Do we know how the debt will be handled by these entities? Per my previous question will we be paying different rates than other customers (to cover our debt) or will the debt be spread across all customers? Perhaps this will be discussed tonight. I will watch the video once posted.

      • Bryan – it was clarified at the meeting we will have current Questar rates (which are about 33% higher than ours in winter) and SESD said their is a SLIM chance our Electric Rates will change from what they are now (so yes we will have a higher rate than their current customers because in reality we are not getting rid of our bonds/debt, they will just be with our new power company instead of our old one). To sum it up – utilities will probably be going up around $120/yr for the average household. They will probably be close to the same most of summer but from the city calculator it shows probably close to $20-40 more per month during all the winter months.

  6. I wonder if it would help to invite (or otherwise engage) mayors and Council members from other cities who have chosen to retain their own utility services?

    -Chad

    • Chad, that is a great thought and while we have not invited other mayors to our town hall, we have discussed this very issue with other municipalities. Specifically I have spoken directly to one mayor and gotten feedback indirectly from another. Both were supportive under Eagle Mountain’s circumstances.

  7. How will this affect people who are on equal pay? Will we have to pay a large sum to Eagle Mountain City when we go to the other billing? Or will the change take place when there isn’t the deficit of winter on our accounts? I know that if I had opted out of equal pay this last time I would have had to pay almost a whole months payment.

  8. We personally would prefer to sell off the utilities to get that debt out of our cities hands. Either way it seems as ultimately the long term is a big unknown, but I would rather our city become as debt free as possible and clear up some of the problems that we previously faced even just last year. Also, I would love more than anything to be able to get alternative internet available besides just 1 company or satellite!!!!

    • FYI – Totally unrelated but reading through the comments and I thought I would let you know to check out these internet companies as well. Besides Direct Communications & Digis there are 3 others that service Eagle Mtn that I am aware of – There is Signal West (only if you live North of Pony Express Parkway), Innovative Air (but only in Ranches I believe) and Utah Broadband. We are with Utah Broadband and really like them, I’ve heard amazing things about Signal West & Innovative Air as well, just never tried them!

  9. We’ve lived in Eagle Mountain for a little over seven years. We came from Bloomington Hills in St. George. In Bloomington Hills our power company was Dixie Escalante. Dixie Escalante was a Coop. All of the residents were like share holders. In December of every year we got a dividend check for about $70. We have moved but we still get a dividend check. Once a year the coop put on a barbecue at Pine Valley, in southern Utah. There were pony rides, train rides, bouncy houses and all for free. While I don’t know the details of how the coop operated it might be worthwhile for someone to look into.

  10. It’s a great idea! Whenever there is a city that owns utilities, it makes for trouble. Thank you mayor for doing a great job!

  11. Kudos Mayor Pengra!
    I really appreciate the effort you are making to include the public in this decision. I have been a resident since the infancy of the city (1998). I am a strong supporter of anything that can help the city eliminate the debt that we have acquired to build our city’s infrastructure. (It is crucial that the City eliminate it’s debt!)
    In the early days of the city, the utility companies did not wish to provide services because they would incur a huge financial burden to pay for the city’s infrastructure. Now that the infrastructure has been built, and throngs of people have moved to Eagle Mountain, Quester would like to purchase the gas portion of the utilities.
    Is Questar going to purchase the utilities and then jack up our rates to pay for the 25 million dollar purchase price or are they going to charge us what other cities are paying in the state and absorb the costs through their substantial profits.
    I just don’t want to see Eagle Mountain pay more as Questar supposedly tries to recoup their costs. Over time their profits will be substantial enough to cover the price they paid for the utilities. I believe we should be paying the same as any other city in Utah.
    It should be a win / win situation for all of us if we are going to do this. Questar pays for the opportunity to service 23,000+ residents without any real competition. We get to pay off our debt and eventually put our money to things that desperately need our attention such as road repair, walking trails and community amenities for our vibrant youth population.

  12. I am amazed at the level of communication that our Mayor has and his concern for his citizens and their opinions. I appreciate how he takes all opinions into consideration, listens and responds. As for the utility issue, many families are “barely making it” and I think a huge increase in utilities would hurt them even more if we sell and utilities increase a ton…with that being said, it is also very important for the City to eliminate it’s debt and free us from political-ran utilities.

  13. Mayor –
    A couple questions I forgot to ask tonight……
    What were the appraisals for the Electric and Gas?
    Have we even seen if Rocky Mountain Power is interested or what they would pay?
    How does this affect our plan with the Asphalt Plant? Where we paid over $1 million to put in the line but were suppose to recoup these costs through their usage?

    Also, just to re-iterate what I said at the meeting….. now that Dan @ SESD has stated it is a SLIM chance we will have anything other than our current rates I would love if you send out a letter to each household clarifying that this is going to cost residents about $120 more per year – not save them $50 like originally stated in the first letter. I know he said they aren’t sure if we are keeping the same base rate but even if we go down to $9 that would only be a $18/yr difference – not much compared to the $170 difference from what residents are thinking it will save them to what it is going to actually cost them. Not many residents watch the meeting videos, read your blog, etc. so if we could send out a letter it would be great – I think the sooner we can be honest and transparent about the costs the better it will be for everyone.

  14. Mayor,

    Thank you very much for your continued desire to be transparent and communicate with residents. After last night’s meeting, I feel like this really will be a good thing for us as a community. I understand that you can’t commit to rates yet, as the negotiations are not yet finalized. I appreciated your grace when others obviously had none. Keep up the good work!

    Ryan

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