Politics took away LES rate cushion
The Lincoln Electric System has not received much sympathy since its plans for another rate increase were announced.
But there should be some public recognition that the publicly owned electric utility has been stripped of some tools that would have allowed it to modulate the impact that spiking natural gas prices has on its operation.
For example, LES has been pressured by some of the local budget hawks to reduce the size of its rate stabilization fund, which at one time stood at $12 million dollars.
If the fund was that size today, LES could have held off on another rate increase for at least another year and given ratepayers that much time for to prepare for another increase.
Currently, LES officials are projecting a revenue shortfall of $9.3 million, citing unexpected higher costs because of a spike in the price of natural gas used to power generators that handle peak demand.
Local budget hawks, however, including the Lincoln Employers Coalition, comprised of some of the city’s biggest employers, have successfully applied pressure through the city’s elected officials, who approve the utility’s budget, to reduce the size of the fund.
Today it stands at about $2 million.
Other utilities have much higher rate stabilization funds. The Omaha Public Power District, for example, has about $32 million in its rate stabilization fund.
The position of local budget hawks, including the Lincoln Employers Coalition, against a sizable rate stabilization fund is inexplicable, since the fund can be invested until needed, providing an additional source of income for the utility.
The coalition and the Lincoln Independent Business Association this spring also argued unwisely against LES desires to promote energy conservation among ratepayers. Many consumers don’t know how much they can save by investing in new energy saving refrigerators and other new technology. That program has a payoff. Slowing the demand for electricity helps keep rates low.
It’s important for ratepayers, especially those who have moved from other states where power companies are privately owned, to remember that by law LES cannot charge more than necessary to supply power to its ratepayers.
Both independent surveys and LES’s survey show that local electric rates are among the lowest in the country. The latest survey shows that LES rates are 6th lowest among 106 cities.
No one likes to pay electric bills. But the proposed rate increase should be kept in perspective. And when politicians start bashing LES, ratepayers should remember that politicians share responsibility for putting the utility in this predicament.
But there should be some public recognition that the publicly owned electric utility has been stripped of some tools that would have allowed it to modulate the impact that spiking natural gas prices has on its operation.
For example, LES has been pressured by some of the local budget hawks to reduce the size of its rate stabilization fund, which at one time stood at $12 million dollars.
If the fund was that size today, LES could have held off on another rate increase for at least another year and given ratepayers that much time for to prepare for another increase.
Currently, LES officials are projecting a revenue shortfall of $9.3 million, citing unexpected higher costs because of a spike in the price of natural gas used to power generators that handle peak demand.
Local budget hawks, however, including the Lincoln Employers Coalition, comprised of some of the city’s biggest employers, have successfully applied pressure through the city’s elected officials, who approve the utility’s budget, to reduce the size of the fund.
Today it stands at about $2 million.
Other utilities have much higher rate stabilization funds. The Omaha Public Power District, for example, has about $32 million in its rate stabilization fund.
The position of local budget hawks, including the Lincoln Employers Coalition, against a sizable rate stabilization fund is inexplicable, since the fund can be invested until needed, providing an additional source of income for the utility.
The coalition and the Lincoln Independent Business Association this spring also argued unwisely against LES desires to promote energy conservation among ratepayers. Many consumers don’t know how much they can save by investing in new energy saving refrigerators and other new technology. That program has a payoff. Slowing the demand for electricity helps keep rates low.
It’s important for ratepayers, especially those who have moved from other states where power companies are privately owned, to remember that by law LES cannot charge more than necessary to supply power to its ratepayers.
Both independent surveys and LES’s survey show that local electric rates are among the lowest in the country. The latest survey shows that LES rates are 6th lowest among 106 cities.
No one likes to pay electric bills. But the proposed rate increase should be kept in perspective. And when politicians start bashing LES, ratepayers should remember that politicians share responsibility for putting the utility in this predicament.
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