Now
Fair
14°
High
27°
Low
10°
Full Forecast

Jobs

Cars

Homes

Rentals

Alerts

Subscribe
Home > Opinion > Editorial
Bookmark Us   •   Make Us Your Homepage

Politics took away LES rate cushion

Comments 14 comment(s)  
E-mail Story E-mail Story
Print Story Print Story
Share  Share
Text Size: 
Tools Sponsor

Thursday, Jul 17, 2008 - 08:04:50 am CDT

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.


$1 Sunday Delivery - Subscribe Today!
Editorial > Back to Top of Story

Post Your Comment

Standards and Rules
All posts to JournalStar.com are subject to our Terms and Standards.
Your posted comment will appear after it has been approved.
Frequently asked questions about story commenting.
(optional)
   
Hide Comments Hide Comments   Newest First Newest First  
not enough information wrote on July 17, 2008 5:10 am:
" The article doesn't say how "local budget hawks" are able to "have successfully pressured applied pressure" to "city's elected officials". Seems to me that either a big part of the story is missing, or you're being a little coy and disingenuous. If you can't say out loud what and who, don't say anything at all. "

 what else is new wrote on July 17, 2008 6:02 am:
" But, Lincoln's only reason for being is to make life better and richer for LIBA and the Employers Coalition. Didn't you get the memo? Let's not forget that both the Employers Coalition and LIBA also opposed LES putting $1 million a year toward a sustainable energy program that might provide some long-term relief for this situation. When you say that local "budget hawks" from the business community successfully applied pressure through the city's elected officials how, exactly, do you distinguish between the two? "

 Dan wrote on July 17, 2008 6:51 am:
" This is a great article!!! Where is LIBA now? We need sustainability built into our government and electric systems. Just like the rise in fuel costs is forcing people to think twice about conserving resources, and my goodness, walking or riding a bike instead of driving everywhere, a rise in energy costs should drive conservation efforts. My question is why do we have to wait and react to these challenges? Why can't individuals, businesses and city council conservatives be PROACTIVE? Nothing in life is free except the sun and common sense. We could seriously use some common sense here in Star City. I really look forwarded to watching what LIBA and our conservative leadership on the council come up with. Where are the solutions or at least an idea or two. I give it up to Mayor Beutler, at least he's producing some thought on the issue. I say raise the property tax five cents and implement the rate increase and get on with it. In additiion, when LES talks about a rate stabilization fund, work to build it. This is our rainy day and we have no real umbrella. "

 russell wrote on July 17, 2008 8:12 am:
" Thank you LJS for reminding us of the consequences of LIBA's actions. It is time that this city gets a new set of non-elected leaders that can see beyond a one month profit statement. "

 Right On wrote on July 17, 2008 9:14 am:
" LES has been a great steward of our public assets for decades.
This is what happens when politicians don't listen to the professionals.
Lincoln - this is what you get when you give a seat on the city council to the LIBA president.
Robin, Ken, John, this is on you. "

 LESS wrote on July 17, 2008 10:59 am:
" To read this editorial is to walk down the path of selective memory.
While it is a fact that costs for all energy have increased due to the falling value of the dollar it therefore is a reality the we will have to fork over more dollars to pay for energy. To blame LIBA or to compair Lincoln's rate stabilization to Omaha's is a farce. OPPD and Omaha is three times the size of Lincoln's.
As far a "sustainable" energy sources go LES does have wind turbines however at their peak of production the only are 35% productive or put another way they are NON-productive 65% of the time.
Another fallicy is the "conservation" angle....correct me if I'm wrong but LES raised rate a few years back and justified it but faulting a cool summer in while Lincolnites used less airconditioning and LES had "over" bought in anticipation of a "HOT" summer and had to pay for the excess...which strangly made sense.We used less or conserved but paid increases.
I believe that the LJS missed another opportunity to explain how the devaluation of the dollar causes increases in the cost of everything but just wanted to "blame" someone locally...nicely played LJS....nicely played. "

 Little gal and guy coalition wrote on July 17, 2008 11:07 am:
" I'd like to see a coalition of little gals and guys formed. We may not have the money that LIBA and the Lincoln Employers Coalition have, but we definitely have the numbers. I am sick of the "let them eat cake" attitude from the city's moneyed class. The voters from the blue collar working class are also investors in this community. We pay taxes and we shop at local businesses. We deserve to have some seats at the table when taxes and utility rates are discussed. "

 Igor wrote on July 17, 2008 11:26 am:
" LESS made a couple of good points in their post. Unfortunately they seem to have flunked gradeschool math. If OPPD has a $32 million rate stabilization fund and is 3 times the size of LES then the fund for LES should be around $10 million. It is only $2 million which is far lower than $10 million. The LJS article was correct to fault the city council and LIBA for this bit of stupidity.
They are correct in the assessment that the Bush administrations massive deficit spending has destroyed the value of the dollar, and therefore the United states of America has lost value and quality of life, all to fight an illegal war based on lies. They are also correct that wind turbines are a lousy investment for this area of Nebraska. The northern and panhandle areas would be better and there are better designs that the LES wind turbines as well. With the new solar cell technology that will be hitting the market in a few years there is some hope for solar to be a good investment but right now it isn't. An investment into switchgrass based ethanol may be a very good investment but that would need some research to be sure of the total cost. Open source geothermal heatpumps seem to be the absolute best value for reducing energy costs but might lead to water use issues. There is no easy answer but this rate hike could have been lower if there was real leadership at the city level and citizens paid attention to what the council does. "

 Igor wrote on July 17, 2008 11:30 am:
" The "little guy" coalition exists already. It has two major parts and some smaller parts. The Democratic party and the Republican party are the big parts. There are also the Libertarians, Reform and Green parties. Get busy and do something. "

 Solar and wind wrote on July 17, 2008 11:39 am:
" Where are the power company investments in non-fossil fuel energy sources now that the price of oil and environmental consequences are looming? Why aren't cities like Lincoln "pressuring" businesses to conserve, and to invest in conservation technologies? The whole structure of energy investment is unsound when it's based on a nonrenewable, polluting resource. "

 cutexpensesfirst wrote on July 17, 2008 3:16 pm:
" Before you blame someone else for the increase proposed by LES you should look at their budget and expenses. Have you notice the fancy color booklets they send out. Who do they need to impress? They don't have competitors. Maybe they should save the consumers some money simply by printing in black and white. "

 Absolutely wrote on July 17, 2008 4:44 pm:
" I agree with 'cutexpensesfirst'. What kind of $$ did LES WASTE by sending out the nice color coated binder? How many of us that received it just threw it away? I conserve as much as I can, always shutting off lights, keeping the thermostat higher than what I'd like, keeping blinds closed, new energy efficient light bulbsetc. Not everyone can run out and buy a new energy efficient fridge/appliances or new windows. I'm tired of LES and their excuses, even more so of LJS and it's one-sided opinions. I agree that LES should look at alternative means to suppling energy, but maybe they ought to look deep inside their own organization first! "

 CC wrote on July 17, 2008 4:45 pm:
" What happens when you won't let a city grow. Ya want to be a little hick
town then the people have to pay the consequences. I'm doing my part,
as I sit here writing this with sweat running down my face and body and
don't turn on the air conditioner, yet I get LES bills that have doubled
as if I was running my air conditioner!! Live in this town your gonna
get taken to the cleaners no matter what!!! "

 Voter wrote on July 17, 2008 7:50 pm:
" Thanks LIBA and Coby! You sure are swell. I hope you and the Republican puppets on City Council further the damage to the everyday citizen of this city by making more budget cuts instead of using 1 time funds to balance the city budget! You deserve an award! "

Ads by Yahoo!