Independence to study sale of municipal power company — a potential huge city windfall
Independence will begin studying the possible sale of its municipal electric utility, Independence Power & Light.
Members of the city council voted 6-1 Wednesday evening on an item instructing the city manager to begin hiring consultants to evaluate the public utility, communicate options with the public and set the question of a sale up for a future public vote.
“Independence Power & Light is at a crossroads, and decisions are needed regarding the future for the publicly owned utility,” read city documents on the measure.
The city’s action was only the first step in a process that could last for months or even years. But any sale of the utility — which touts some 50,000 customers — would undoubtedly deliver the city a one-time infusion of cash.
For years, the city has pondered what to do about the future of its utility, an entity enshrined in the city charter. In the Kansas City metro area, most homes and businesses are served by investor-owned utilities like Evergy. Only Independence and the Board of Public Utilities in Kansas City, Kansas, operate municipal electric companies.
Independence has struggled to maintain its own power generation as the environmental and financial costs of coal plants has pushed many other energy firms into renewables. While many say IPL provides exceptional service and reliability, city officials note that their customers pay higher electricity rates than those served by for-profit companies in other parts of the region.
The utility is also facing financial headwinds: Its cash reserves will drop below the utility’s target of $25 million by 2025, officials said. And those reserves will drop to a negative $97 million by June 2032 as the costs to maintain the utility’s infrastructure mount.
“The problem we have, as we sit here today is that IPL is on a course to a financial train wreck, due to what I believe to be questionable decisions in the past,” said Councilman Jared Fears. “So clearly something has to change.”
The electric utility has been the subject of several scandals in recent years.
For example: The Independence City Council in 2017 awarded Environmental Operations, a St. Louis company, a $9.75 million bid to tear down the city’s defunct Missouri City power plant. That was more than twice the amount in a bid from a competing firm.
Environmental Operations is owned by Stacy Hastie, a well connected player in Missouri politics. His general counsel is John Diehl, a former Missouri House speaker who resigned in 2015 after The Star revealed his relationship with a 19-year-old legislative intern.
Also in 2017, the city council voted to purchase the former Rockwood Golf Club for nearly $1 million. That decision came just months after a company called Titan Fish purchased the property for $550,000 from a firm that had owned the closed golf course for several years.
Both of those transactions were the subject of investigation by the FBI in recent years.
In 2020, Independence Power & Light shut down its Blue Valley power plant, which generated 90 megawatts of energy. IPL currently generates electricity through combustible turbines and a solar farm, owns a stake in a natural gas-fired power plant in Pleasant Hill and buys power from other utilities, such as Evergy.
In operating a municipal utility, the city must maintain a certain level of generation capacity to meet its own customer demand and to help the wider grid under its membership agreement with the Southwest Power Pool, which manages the electric grid for the central United States.
For months, city leaders have pondered what to do about Independence’s aging and inefficient fleet of gas combustion turbines.
Those units are used only at times of peak demand, not for ongoing generation. The council and city have long talked about upgrading or replacing those units and some council members have even looked to add an entirely new power plant to the grid.
On Wednesday, council members rejected a proposal to replace two turbines at a cost of more than $80 million with a 6-1 vote.
Several council members noted that the city is merely studying the future options for the utility and has not yet committed to a sale. Any sale would be contingent on a public vote — and likely months of public debate.
Council member Brice Stewart, the only one to oppose the study of a potential sale, described the utility as the city’s single greatest asset.
“With as important as energy is now, it’s going to be even more important in five, 10, 15, 20 years,” he said. “And I will not support anything that mentions selling this utility.”
Council member Mike Steinmeyer voted with the majority but still expressed skepticism about a future sale. He noted that the decision was up to residents of Independence, not its elected leaders.
“I wouldn’t sell my children’s inheritance and I’m sure not about to sell yours,” he told the crowd. “...We need to take a moment and we need to reflect on what kind of city we’re going to leave for the next generation of residents and the future leaders of this city.”
