Charleston’s new contract for electricity is expected to reduce price increases for power by $80,000 over the next 15 months. This contract only affects city-owned property, not residential or private buildings.

A power-purchasing group consisting of the City of Charleston, the City of Mattoon, Mattoon School District and Coles County government chose to contract with WPS Energy Services after being informed of rate increases from the previous supplier.

“It will reduce (the cities’) projected out-of-pocket increase on power this year from $245,000 to $165,000. That’s a reduction of $80,000 … It’s important to note this is still an increase and not a savings,” said Scott Smith, Charleston city manager.

In an auction Jan. 31, WPS was the lowest bidder. The City of Mattoon, the Mattoon School District and Coles County all chose to sign with WPS that day, and the City of Charleston approved the contract Tuesday.

“The decision was made to look at options back in December after we sat down and met with AmerenCIPS officials,” Smith said. “We were informed that our accounts fall under the new rate structure and would increase anywhere from 60 to 88 percent. We estimated our increases at that time to be around $250,000.”

The cities, county government and the school district had previously bought energy directly from AmerenCIPS.

“Under deregulation, Ameren is still supplying the power,” Mattoon Public Works Director Dave Wortman said. He explained that WPS buys the power, but AmerenCIPS’ existing lines are used to deliver it.

“We will continue to receive one bill from AmerenCIPS,” Smith said. The municipalities will pay WPS for the electricity and will pay AmerenCIPS for the use of their lines.

Mattoon City Treasurer Preston Owen said that the City of Mattoon is expected to pay $260,000 less than if it had gone with the increased rates from AmerenCIPS. He said that the rate for Mattoon will be 6.1 cents per kilowatt hour.

Mattoon will see the most money saved at its wastewater treatment plant. “We (will save) $232,000 just at our wastewater treatment plant,” Wortman said. “It uses the most energy.”

The contract locks in rates until May 2008. The municipal governments and school district may decide to renew at that time. “We’ll see how the energy prices are then,” Owen said.

Charleston school district had also considered joining the power-purchasing group, but is currently a part of another energy-buying co-op in Illinois. They have an option to join later if they want to, Wortman said.