How Lebanon's Utilities Actually Work: A Conversation With Public Works Director Richard Shockley

With electric rates set to go up in 2027 and a lot of public questions about why, I sat down with Public Works Director Richard Shockley to get answers from the source.

With the increased electric rates and more comments coming in as infrastructure and energy costs rise, the Public Works Department recently announced that rates will go up in 2027. So I reached out to the city and asked if Richard Shockley would come on and explain how our infrastructure works. I think we get upset because we don't have all the information. We make assumptions, or we don't understand how a system works, or where the costs lie.

Richard and the city cooperated, and we sat down for about twenty minutes to talk through what Public Works does, what they manage, how our utility system works, why we're seeing rate increases, and what our rates actually are.

Here's the breakdown.

What Public Works Covers

Shockley laid out the scope. Public Works manages water, sewer, electric, streets, stormwater, and the city's fleet of vehicles. That's a wide range, and most people never think about it until something stops working.

A common point of confusion is what the city actually owns versus what falls to the state. The city maintains roads inside city boundaries. MoDOT handles Highway 5, Jefferson at 64, Highway 32 east and west, and I-44. In plain terms: a pothole on Jefferson, or something happening at one of the railroad crossings on a state route, is not the city. That's a state of Missouri issue. Shockley said the city is a true partner with MoDOT and helps where it can, but the responsibility itself lives in a different department.

Stormwater

Shockley said Lebanon sits on a plateau, and that's actually a benefit. There are three major watersheds carrying water away from the city in different directions. Cities built around a single major river or stream face bigger flooding challenges. As Shockley put it, in the Ozarks Mother Nature can't make up her mind. Seven inches of rain one week, drought the next. Being able to shed water in multiple directions matters.

During a rain event, the system can move millions of gallons. Shockley said they measure it in cubic feet per second. The system uses pipes for conveyance, drainage ways, and detention ponds that hold stormwater back so it releases gradually instead of all at once.

Drinking Water

According to Shockley, city water comes from deep wells, most of them between 1,400 and nearly 2,000 feet deep. The pumps sit at around 700 to 850 feet below ground. Each well pumps between 400 and 1,000 gallons per minute.

He said something a lot of people don't realize: the water system isn't just designed for drinking water and business use. It's designed for fire protection. The water towers around town hold enough storage to cover about 36 hours of usage, and that storage gives the fire department the volume they need during a major fire.

On average, the city uses about 2.7 million gallons of water per day.

Wastewater

The water treatment plant is something a lot of people don't get to see, and the amount of testing the wastewater goes through is worth knowing.

Shockley said the plant runs about 18 tests per week on site, plus sends additional samples out to contract labs where it's more economical. Across the year, they're running somewhere between 6,000 and 7,000 tests, both for process control and to satisfy the state discharge permit.

After treatment, the water discharges into the Dry Auglaize, which travels north and eventually ends up in the Lake of the Ozarks area, down around Tonka.

Where Our Electricity Actually Comes From

This is the part most people have questions about, so Shockley walked through it from the beginning.

Lebanon is partnered with a 35-city pool of utilities within the state. As a pool, they either buy ownership into power generating facilities or sign Power Purchase Agreements, usually 20 to 30 year contracts.

Shockley listed what's in the portfolio. A power plant in Nebraska City, Nebraska. A couple of plants down in Arkansas around the Bootheel area. A coal plant just south and east of St. Louis, in Illinois, sitting right at the mouth of the mine. The coal seam there is about 15 feet high and 120 feet underground, so the coal goes straight from mine to plant. Power plants in the Kansas City area. Hydroelectric allocations on the Missouri River and the White River basin dams. Wind generation out in western Kansas.

Power gets delivered into Lebanon at 69,000 volts from Show-Me Electric, the city's transmission provider. From there it runs through a transmission loop around the city. Substations step it down to 7,200 volts for the distribution system. By the time it gets to a home, it's at 240 volts. Businesses get 460 volts.

Why Rates Move Up and Down

Shockley explained that even with ownership and long-term contracts, the pool doesn't have 100 percent of its electricity needs locked in every day. Sometimes the pool has surplus and sells to the market. Other times it has to buy off the market.

The key point Shockley made: electricity is not point A to point B. It's traded just like any other commodity, like corn, orange juice, or coffee. And the market responds to weather.

This past winter, during that extended cold spell that lasted five to six days, the pool was buying power off the market at about three to three and a half times what they had been selling it for. The city can't pass that kind of shock straight onto customers, so they buffer it using reserves and spread the impact out over time.

To put that in everyday terms: if your normal electric bill is around $175, but during a cold snap your heat and everything else is running nonstop, instead of getting hit with a $1,000 bill, your bill might go up $50 or $75. Shockley confirmed that's how it works. You're still paying the same kilowatt hour rate, you're just using more because it's cold.

That's why Public Works tries to hold a 20 to 30 percent reserve. The reserve covers two things: market spikes during extreme weather, and damage from storms. Shockley pointed to a May 2020 straight line wind event that cost the city almost $2 million to rebuild damaged equipment. It wasn't even classified as a tornado.

He also pointed out that the times are changing on disaster declarations. The federal government doesn't always acknowledge a disaster event the way they used to. There's bureaucracy involved. The federal government has to make an official declaration before any funds get released to offset the city's cost. If that doesn't happen, the bill stays with the city. A simpler way to picture it: it's like your insurance company denying a claim. Shockley said that's exactly right.

What We Actually Pay

For context, here's how Lebanon compares to the rest of the state and country:

• National average: 17 to 20 cents per kilowatt hour.
• Missouri average: 11 to 13 cents per kilowatt hour.
• Lebanon after the upcoming adjustment: just under 11 cents, specifically 0.1079.

Shockley explained that residential and small customers are billed on energy use at the kilowatt hour rate, with demand baked into that rate. Larger commercial customers get charged both an energy cost and a demand cost, because demand is what their peak usage looks like. The infrastructure has to be built to handle those peaks.

Why Infrastructure Costs Keep Climbing

The next question was what's driving the rate adjustment beyond normal cost of living, and Shockley's answer matched something most of us are already feeling.

Since COVID, there hasn't been a normal inflation rate on anything. It's not the simple two or three percent annual bump anymore. Power poles have gone up three to three and a half times since 2023. Transformers and component parts have climbed 10 to 15 percent every year. He said they keep waiting for it to normalize.

His point: a lot of utility cost isn't tied to the energy itself. It's the cost of delivering it. Poles, wires, transformers, treatment equipment, the works.

In simpler terms, the city doesn't manifest power poles or transformers in a warehouse out back. They have to order them from somewhere, and those suppliers have costs too. It's the same reason tomatoes get more expensive. The broader economy is moving, and the city is buying from that same economy.

Balancing Cost and Reliability

Shockley said the way he sees the job, Public Works is responsible for maintaining roads and a utility infrastructure that keeps the community competitive and a good place to live, both for residents and for businesses. That means balancing reliability against cost.

On reliability, the numbers back that up. On May 20, the city is receiving an award from the American Public Power Association placing Lebanon in the top 25 percent in the nation for reliability. The city has received this award multiple years running.

Closing

Shockley left us with a good reminder. Lebanon is a hometown utility. When you have a question, a concern, or an outage, you're not calling a call center in another country or sending your bill to another state. The people running it live right here in the same community you do. That carries some real value.

If something on your bill doesn't make sense, or you're curious how a fee works, or you want to understand what's behind a rate change, the city is there to talk it through. The folks at Public Works would rather walk you through the answer than have you guessing. Better information leads to better questions, and better questions lead to a better understanding of the place we all live.