Evart to sell electricity?
EVART — In hopes of stimulating economic growth, the city of Evart is looking into the idea of forming a publicly-owned utility that would supply electricity to customers in the city.
With it’s own public utility, the city would be able to sell electricity at a rate of 15 percent less than a for-profit utility company. The estimated total cost of the project is $4.6 million.
“If we became our own public utility, we could offer electricity at lower prices,” said Evart city manager Zach Szakacs. “If we could offer lower than what electric companies offer, we could entice new businesses to come here.”
Michigan Solutions Group, an economic development firm in contract with the Local Development Finance Authority, completed a pre-feasibility study over the past few months to determine the possibilities of bringing the project to Evart. The study looked at the city’s current electric use and the estimated cost of creating and operating it’s own municipal utility system.
The $4.6 million price tag is estimated based on building a new distribution center to service Evart. The study reports that acquiring Consumer’s Energy’s distribution system also could be an option. Of the estimated cost, $2.3 million would be used to build a new
distribution system and $1.6 million would be used to build an additional substation. Some $200,000 would cover start up costs and reserves and other money would be spent on legal, engineering and debt services. Up to $25,000 would include Michigan Solutions fee to serve as the project managers.
Despite the large price tag, the project could offer many benefits to the city of Evart. Along with potentially being a catalyst for economic development, a municipal utility would allow for electrical services to be locally controlled and regulated, offer an efficient and reliable service as well as a good return on investment.
A municipally-owned utility company would not be subject to rate regulations by the Michigan Public Service Commission and the Federal Energy Regulatory Commission that for-profit electric companies are subject to. Evart would join more than 2,000 communities across the United States have created municipal utilities and more than 50 of those are in Michigan.
“It seems to be a very persuasive (case), but I think the council should not make any rash decisions,” said Mayor Eric Schmidt at the council’s meeting on Monday.
If the decision was made to establish a public electric utility, the next step would be to engage a law firm to assist with legal matters, complete a feasability study, hold one or more public forums and gain approval from voters.
If the city proceeds with the project, the public utility will not be available to residents for three to five years.
MSG will host a community meeting at 7 p.m. on Oct. 11 at the Evart Depot to introduce the project and gain input from city residents and business owners.
“I think it’s a great idea and it would be great for the future of Evart, but the cost to start it up is so high,” Szakacs said. “The board will have to make a decision if we want to spend the money or not.”
At the next Evart City Council meeting at 7 p.m. on Oct. 15 at the Evart Depot, MSG will present a proposal to council in hopes of moving the project forward.