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Groups oppose planned LES rate hike

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BY ALGIS J. LAUKAITIS / Lincoln Journal Star

Wednesday, Jan 30, 2008 - 11:32:37 am CST

Two groups — representing big and small businesses — are opposing Lincoln Electric System’s proposed 5.5 percent rate hike.

The Lincoln Employers Coalition and the Lincoln Independent Business Association want the city-owned utility to reduce the hike by 1 percent and 1.5 percent, respectively.

“We support a strong LES with reasonable increases,” coalition chairman Bob Caldwell said. “We are supporting about 90 percent of what they want in this increase.”

Story Photo
Proposed LES rate increase:

What? The Lincoln Electric System wants to boost its rates by 5.5 percent, which would raise about $11 million annually.

When? Effective March 1.

What would a typical resident pay? An additional $3.50 per month.

Why? LES says it needs to pay for new power generation and transmission facilities, replenish its rate stabilization fund, pay for increased costs to haul coal by rail, and develop a sustainable energy program.

Who opposes it? Lincoln Employees Coalition wants a 4.5 percent increase; Lincoln Independent Business Association supports a 4 percent rate hike.

Who likes it? The Wachiska Audubon chapter supports the utility’s proposed sustainable energy program, which would be funded from the rate increase.

What’s next: The City Council will hold a public hearing on the proposed rate increase Monday.

Caldwell said the coalition is made up of about 22 of Lincoln’s largest employers, including Linweld, Goodyear and Nebco. 

About two years ago, the group successfully challenged a proposed energy surcharge, he said, and has since worked with LES to keep the utility “strong” and power costs low.

The LES Administrative Board has approved the 5.5 percent increase but the City Council must give the final OK. 

Both business groups say they plan to testify at the council’s 1:30 p.m. public hearing Monday.

LES says it needs the increase to cover increased power generation, transmission and coal transportation costs; replenish its rate stabilization fund; and finance a new  sustainable energy program.

In a prepared statement, the utility said discussion of a rate increase was included in its budget 2008 preparations last year. Details were distributed to customers in their December bills and presented at a public hearing on Jan. 8.

The coalition, which is pushing for a 4.5 percent increase, said LES could reduce its rate increase by dropping plans for its sustainable energy  program. LES plan to use 0.5 percent of the increase to generate $1 million to fund the program.

The coalition does support a voluntary checkoff allowing customers to donate a half-percent to the program, Caldwell said.

It also believes LES spends too much on administration, advertising and litigation. Caldwell said some of that money, along with money from capital improvement projects, could go into the rate stabilization fund, which has a balance of $2.4 million.

The Wachiska Audubon chapter supports the sustainable energy program and is asking membership to contact the council or testify at the public hearing.

“Saving energy is a good thing in itself. Making things that use electricity more efficient is also the cheapest and fastest way to curb pollution from global warming or climate change,” Arlys Reitan told chapter members in an e-mail.

LIBA executive director Coby Mach said his group also advocates a voluntary checkoff to fund the sustainable energy program.

Said Mach: “LES is telling us that this is important to people in our community. If it is that important, we feel that people will voluntarily contribute to it.”

LIBA wants LES to adopt a 4 percent rate hike, suggesting the utility take about $4.5 million earmarked for a future methane gas extraction facility and put those dollars into the rate stabilization fund.

Said Mach: “If you feel the rate stabilization fund is that imperative, move some dollars around rather than taxing the citizens of Lincoln for your savings account.”

 Reach Algis J. Laukaitis at 402-473-7243 or alaukaitis@journalstar.com.


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question wrote on January 30, 2008 11:48 am:
" If the are owned by the city and are basically the only power utility in town then why are they spending money on advertising? I know LES exists especially when I look at my bills. "

 Umm wrote on January 30, 2008 12:09 pm:
" What good does it do to try to conserve, which I have
always done, they just raise the rates anyway. I pay as
much for the city owned LES as I did for a stockholder
owned company when I lived in another state. Apparently,
instead of the money going to pay stockholders, here in
Lincoln it goes to pay bigger salaries. It sure is going
somewhere!!!! So quit bragging about Nebraska's "cheap"
power!!! "

 downtown dweller wrote on January 30, 2008 12:18 pm:
" i agree with LIBA & LEC. as customers, what can we do to oppose this rate hike? "

 BR wrote on January 30, 2008 1:11 pm:
" People are so easily snowed in Lincoln. They brag electric
rates are cheaper because LES is city owned. Yet compare
it with a stockholder owned company, yeah you might pay
$200.00 more a yr for electric but property taxes where
I lived were $3,500.00 LESS! Little wonder why businesses
don't want to come here, you don't snow them!!!! "

 advertising wrote on January 30, 2008 1:13 pm:
" why does les need to advertise? do we have other options for electricity providers? (that's an honest question - not trying to be sarcastic.) "

 Of course... wrote on January 30, 2008 3:10 pm:
" With the economy slipping into a recession what better way to help the customers out than by asking for more money on something that's fine as it is. "

 competition... wrote on January 30, 2008 3:17 pm:
" Let's just get rid of the MONOPOLY and allow in some competition...that will lower rates!!! "

 russell wrote on January 30, 2008 3:28 pm:
" What is LIBA's plan for future energy sources?
A successful sustainable energy program might reduce Lincoln's need for coal and high priced natural gas (which is used for summer load peaks). Less natural gas used for electricity translates into more gas for home heating. "

 James wrote on January 30, 2008 3:37 pm:
" Are figures ever made public on just how much advertising LES is purchasing? By that, just how many actual dollars are invested in media costs each year by the utility? If there is new information to distribute to the citizenry of Lincoln, why isn't just included in print with each month's bill, since we all regularly receive them anyhow? And, if they are a city owned utility, how many dollars are going to administrative salaries? And just who decides how these dollars are to be spent? As long as LES is producing pie charts and illustrative graphs, could they release some of these costs that the public is absorbing with each bill they pay? People are not only at their end of their financial ropes, but their patience is wearing thin as costs of living grow and their income and the value of their dollars shrink. So, why not let tax payers see these itemized expenses from LES before the city council rubber-stamps another rate increase. Education is the greatest defense in a democracy. So, please educate us in detail, LES... Where are all those dollars really going? Thanks for reading. "

 oh board members wrote on January 30, 2008 3:43 pm:
" LES board members, give back your bonus and extra retirement you got this year...that will help "

 Kevin wrote on January 30, 2008 4:07 pm:
" My guess is that the advertising budget at LES is minimal and truly more information oriented than it is targeted at increasing revenue.

But I could be wrong. "

 Vote No wrote on January 30, 2008 4:43 pm:
" Sometime somewhere our government has got to stop bleeding us dry. "

 Mr. Big says wrote on January 30, 2008 4:55 pm:
" I'd pay FAR more for Electricity than I do now. Do I need to sign up or something? "

 The FACTS wrote on January 30, 2008 5:15 pm:
" In typical fashion people are responding to something they don't understand. FACT :Lincoln has among the lowest rates in the country. FACT: Unlike ALLTEL, Windstream and Time Warner they have a board and city council to have input into rate increases. FACT: LES is not a monopoly as it is owned by the public vs. ALLTEL, Windstrem and Time Warner. FACT: Thanks to LES Lincoln has an extremely high bond rating that benefits the rest of the City. FACT: LES if it were a private company it would be paying its staff and employees higher salaries and giving million dollar bonuses like most private companies including ALLTEL and the other variations of the Phone Company. LIBA and the other organization have absolutely no business trying to micromanage a business with the track record of LES with national standing both in bond ratings and rankings for low rates. If the members of LIBA are so well versed in running businesses and knowing what's best for the community why haven't they done more for the community as a body and as individual members? Why doesn't LIBA focus on something beneficial and positive for this community. You don't see the rest of us telling the individuals comprising this organization how to run their businesses. "

 whatever wrote on January 31, 2008 5:18 am:
" LES like all electric utilities in Nebraska are publically owned not for profit organizations. Some who call for "competition" don't realize that Nebraska would be left in the "cold" with higher rates and poorer service if our system was "privatized" as their simply isn't a lot of money to be made in Nebraska via electricity. And even if it were "privatized" you would never have more than one "competing" utility due to infrastructure costs. Generally it would seem LIBA is very parochial organization that simply can see no further than the next line in their check register. Exactly what has LIBA done for Lincoln and it's citizens lately. "

 Progressive Rate wrote on January 31, 2008 7:18 am:
" LES should use a more progressive rate that charges those who use the most electricity a higher rate. I conserve electricity, use use low wattage bulbs, shop for efficient appliances, and try to minimize my electrical use. Seems like there should be a reward for that compared to those you use more than they need to.
Wasteful use of electricity should be more expensive to help encourage wasteful users to modify their behavior. "

 Ed wrote on January 31, 2008 7:50 am:
" Amazing that LIBA knows how to structure electrical rates better than the LES board! Now that's power, when you have time to run the electrical company as well as you business! "

 Kind of Ironic wrote on January 31, 2008 8:24 am:
" Why does LES a governmental sub-unit use public funds to pay dues LIBA a quasi-private organization with a political agenda??? Why does LES spend so much public revenue to advertise on radio and TV??? "

 BYOB wrote on January 31, 2008 8:44 am:
" Conserve electricity at home, demanding less, L.E.S. has a major shortfall now because everyone is saving energy so they raise the rates, have any of you heard of the word Monopoly?
All utilities to include cable and cab service are allowed to be a monopoly by our city council, what did you expect in Lincoln, Nebraska the Good ole Boy state? "

 WCG wrote on January 31, 2008 8:48 am:
" No one likes to pay higher utility rates, but get real. Energy costs are skyrocketing across the country, and there's not much LES can do about it. And yes, we STILL have cheap rates compared to most places. And no, you would NOT have lower property taxes if LES were private (though you'd have higher electric rates). An electric utility is a natural monopoly, with physical hookups to every building in town. Do you expect to get your electricity by satellite dish? And if you open up the wires to competition, companies will cherry-pick the big businesses who use huge amounts of electricity, and small consumers will be left paying much, much more. This whole thing is laughable. These groups want LES to drop its sustainable energy program so they can save a nickel. Isn't it sad that we can understand global warming and our energy security problems, but STILL be too greedy to do anything about them? We complain about poor people destroying tropical rainforests in order to eat, but fat cats in America aren't willing to make the slightest effort to protect our environment or to keep Saudi Arabia from owning the world. I have nothing but contempt for these 'business groups,' and I'm very glad that LES is doing something - though not nearly enough - to keep America sustainable, not just through the next year, but though our lifetimes, our children's lifetimes, and long after that (we hope). "

 Been to school! wrote on January 31, 2008 9:08 am:
" Well lets see, if my electric bill is increased 4% it
will be as much as I was paying to Duke Energy in another
state, a stockholder company!. FACT: Non-profit, lowest
rates in country - not according to my bills. FACT: If
you think your saving soooo much in your city owned electric company, have you checked your property tax bills
lately??? In my Duke Energy electric state my property
taxes were $615.00 for a larger house big yard (and freedom) versus $4,100.00 here in Lincoln for a smaller house and NO yard. Wheeeee, aint it alot cheaper to live
in Lincoln???????? Some people just don't know when and
how the city robs ya blind!!!!!!! "

 IN A RECESSION wrote on January 31, 2008 9:45 am:
" Is it me, or isn't the government about to issue REBATE checks because people CAN'T pay their bills as it is? What in the hell is LES thinking? People are already on a budget as it is, NO MORE. Why are they asking for this now, with the economy slowed. This is the wrong time. "

 Shadow wrote on January 31, 2008 9:59 am:
" LES is not city owned, it is a publicly owned company and i can prove it. LES spent alot of time and money to try and bring low cost telecommunication services to lincoln to compete with time warner and what was known as allsmell (now windstream). then the power that be (state and city politicians) passed legislation banning any publicly owned company from offereing those services. even with all of the rate hikes, LES still offeres their services at an extremely low cost compared to other places. am i saying they are the cheapest, no, but they are not as bad as they are made out to be. "

 Hey 5th Grader wrote on January 31, 2008 11:45 am:
" So Been to School says that LES has higher electric costs than Duke Energy, an investor owned utility, serving North Carolina, Indiana and Kentucky. A little internet research says that Duke is actually more costly, to the tune of 15% higher per month.

Lastly, what does the electric utility have to do with property taxes? Answer, nothing. So, Been to School, look in the camera and say..... "

 ej wrote on January 31, 2008 12:01 pm:
" I'm sure we'd all be better off if LES just went broke, or if they do nothing to ensure reliable energy down the road.

I don't like rate hikes either, but geez, think you're complaining now? What are you going to do when you don't have the power to run your computer so you can come on here complain about it. "

 Please research wrote on January 31, 2008 2:45 pm:
" Here is a link to a very informative website on electric rates throughout the U.S.
http://www.eia.doe.gov/fuelelectric.html "

 jenn wrote on January 31, 2008 2:46 pm:
" someone got it right when way back when they first put on the extra surcharge to help pay for the ice storm, they said that LES would propose another hike after the surcharge was dropped. Here we are! Good prediction "

 Truth wrote on January 31, 2008 3:23 pm:
" The rate hike was planned well ahead of the ice storm, and actually that surcharge was dropped ahead of schedule. LES is owned by the City of Lincoln, the mayor appoints their board, and the city council and mayor approve their budget and rate hikes. OPPD, NPPD and Norris have boards that are elected and don’t have a City Council and mayor trying to run/ruin their utility. "

 Another wrote on January 31, 2008 9:06 pm:
" city with a city owned electric company was recently audited by the state and found a lot of problems. One being that they gave to private entitys. Another was the salary that was being paid to the ceo. Maybe someone in lincoln should get a petition up and present it to the city attorney. One blog was about someplace else being cheaper on taxes and another questioned the reasoning. I could see the facts from that. The les and city are as one. Maybe the rates are 6 or 7 cents per kilowatt but the taxes on the property the electric is provided to is outrageous. I live where the rate is 7 cents per kw and my tax on property is about 1/3 to 1/4 of what it would be in lincoln. When pricing a city you have to look at the total cost of living there. We have lots of folks from nebraska coming here to find a place because of the cost of living. Every year the utilitys in lincoln go up including the price of auto gas and taxes. The people in lincoln on a fixed income just can't take anymore of it. I am not talking about elderly either. I guess if you don't know any better you just accept lincoln and assume the rest of the u.s. operates like it. "

 wages wrote on January 31, 2008 9:54 pm:
" wages at les compare if not higher than private/stock holder utility companies ps fact its clear your a les employee trying to save face give it a rest "

 Marilyn McNabb wrote on January 31, 2008 10:02 pm:
" Some bad news for the writer who asked LES Board members to give back "your bonus and extra retirement you got this year." I'm a Board member. We don't get paid. We don't get bonuses. We don't get retirement benefits, much less extra ones. We do get a lot of reading, thinking and meeting. Are you confusing LES with a privately-owned utility? "

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