Update Aug. 26, 2018

City receives IPL management audit

The City Manager had a wide-ranging performance management audit done on Independence Power and Light which covered many major issues and resulted in 28 different recommendations.

This was the first audit of IPL in over 17 years.

 Download report

Download report

The final report, issued in July 2017, commented:

"Stagnant economic development results in no growth in transmission or distribution assets and diminished workload for the labor force that maintains those assets. The challenge will be to right size the labor force in the short term to match service demand and to shape the profile of the workforce in the longer term to match the power availability/reliability strategy selected for the future."

That audit's executive summary concludes that the city utility is "at a crossroads" because its current 193 megawatts (MW) of generating capacity is within "five years of end of life."
 

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One of the items is to show the city utility tax separately on customer bills rather than including it in the base rate. The utility tax is 9.08%. Showing the utility tax separately, the consultants say, would show IPL rates are more competitive compared to neighboring utilities.

The audit was done by Management Partners and Michael Bell Management Consulting. This was the first audit of IPL in over 17 years.

The audit presentation provided this background information:

  • Only 3% of power sold to customers is generated by IPL
  • IPL needs to replace 160 MW of "aging uncompetitive generating capacity" - a significant portion of IPL's total system capacity of 360 MW.
  • IPL has experienced negative cash flows and a deteriorating financial condition which can affect bond rating and borrowing costs.
  • Potential new major projects could significantly increase costs and long term financial obligations

The audit recommended a master energy study and subsequently do a cost of service study to determine new rates and rate design. Both those projects are underway and being done by Burns and McDonnell.

The audit also revealed significant employee issues.

Only 33% of IPL employees felt morale was "good" and there was various issues with IPL senior leadership:

  • low level of respect for department leadership
  • fear of retaliation for reporting policy violations
  • concerns that accusations of harassment or discrimination are handled timely and fairly.

In general, IPL staff are among the highest paid city employees.

A report card tracking implementation of the recommendations is being maintained. Here's the report from July 2018.

 Click to download three-page report

Click to download three-page report