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Budget OK'd by LES asks for 4 percent rate hike

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BY ALGIS J. LAUKAITIS / Lincoln Journal Star

Friday, Nov 14, 2008 - 06:34:24 pm CST

A $268 million budget that assumes a 4 percent rate hike beginning in March was approved Friday by the Lincoln Electric System Administrative Board.

The proposed hike is necessary to make up a $7.5 million revenue shortfall next year due to increased fuel and coal hauling costs, as well as other factors affecting the utility in a tough economy, LES officials say.

They stressed that even though the hike is included in the 2009 budget, it doesn’t constitute approval of any increase for next year.

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“The rate process is an entirely separate process,” said Keith Brown, the utility’s chief financial officer.

Rate hikes must be approved not only by the LES board but also the City Council, which earlier this year gave its OK to a 9.1 percent increase.

The 2009 budget also includes a 2.75 percent increase for the utility’s wage and salary program. Board member Dawn Rockey stressed the figure is not an across-the-board wage hike for employees and it will be up to management to determine individual salary increases.

The 2.75 percent figure is separate from a 3.25 percent increase next year for workers who belong to the International Brotherhood of Electrical Workers.

The 2009 budget — $17.4 million less than the current budget — will be the subject of a public hearing before the City Council on Dec. 1. A vote is set for Dec. 15.

Coby Mach, representing the Lincoln Independent Business Association, addressed the board before the vote and suggested LES look for ways to reduce the proposed rate hike to help the “poor and disadvantaged.”

But he commended LES management and the board for their work on the 2009 budget, especially for finding ways to reduce internal operating costs.

But he said LIBA has the following ideas for cutting costs:

* Keep interest earned from the Rate Stabilization Fund in the fund and not spend it on operations, as is the current practice.

* Reduce retirement benefits to reflect those in private industry.

* Work with city officials to find ways to save electricity, like turning off every other street light or turning off lights completely between 2 and 3 a.m., as long as there is no impact to public safety.

* Make “small efficiencies” in operations, like publishing its annual report on lighter paper stock.

Board member Patrick Beans suggested that keeping the interest in the Rate Stabilization Fund is something the board should consider.

But the fund only has about $2.6 million in it and the 2 percent interest it earns is not a lot of money, he said. LES needs to invest the fund’s money for shorter periods of time so it can be accessed quickly when needed, he added. Next year’s budget includes adding $4 million to the fund.

LES made changes in its budget, including cutting its advertising budget by $146,300. The utility also came up with a more detailed sustainable energy program and plans to spend $1.1 million to help customers and business save on their energy bills.

Board member Marilyn McNabb said that amount doesn’t reflect what LES should be doing. She is pleased with the $1.1 million, she said, but not “satisfied” with it.

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


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... wrote on November 14, 2008 3:22 pm:
" Didn't our mayor state that an either 11 or 12 percent rate hike was too much, so LES made it 9 percent. Now with this 4 percent hike, the total rate hike is 13 percent! Ha ha! I hope my math and facts are wrong, so someone please dispute me and make sure that I'm wrong! "

 Mathman wrote on November 14, 2008 4:07 pm:
" ..., actually your math is wrong. A 9% increase and then a 4% increase is not only greater than 11 or 12%, but actually greater than 13% of the original rate. If your bill was $100 a month originally, a 9% increase would make your bill now $109. If it was a 13%, then your bill would then be $113. But beings that they had a 9% and then a possibly a 4% increase, your bill would then be $113.36 which equates to a 13.36% increase. Just an FYI from a math major. "

 silverpiece wrote on November 14, 2008 5:33 pm:
" A forecast of consumption is absent. The public's knowledge nowadays of public utilities is not great. What might conservation projects in usage/community relations produce in savings, economic production and examinations of usage throughout history in times of rising energy costs and economic troubles? Sounds like a multi-institution collaboration project's in store, yet businesses shouldn't be forced into difficult regulations. For all the talk of running government buildings in environmentally efficient manner, we don't demonstrate satisfactorily sufficient efficiencies. "

 What wrote on November 14, 2008 5:35 pm:
" Wasn't the 9.1% hike because of high fuel cost? Since the fuel price has fallen sharply shouldn't there be a 9.1% rate decrease. I understand that the rate decrease will never happen but would expect no increase in the near future because of this. "

 Carrie wrote on November 14, 2008 7:32 pm:
" LES always has their hands out and our city seems to always sway with them. Time to stand up and ask their "people" to take a bonus cut and leave the rates as is. I bet that would satisfy their budget shortfall. "

 Jay wrote on November 14, 2008 7:44 pm:
" My question is, why does LES need to advertise? To inform me that i'm using their electricity on my TV? "

 Brad wrote on November 14, 2008 10:16 pm:
" Give everyone a break. The fat cats in the big offices will survive. The country club will not kick you out and you can still live in the ridge. Quit with all the big parties, bonus checks and perks. What does it feel like to shut the heat off on someone who is struggling? OH, I bet it is sweet. I hope you top dogs are never in that position. Think about it. "

 Open the books wrote on November 14, 2008 10:43 pm:
" Let's check out the salaries of ALL LES employees. Anyone know if this is public information? Lets start with the meter readers. They walk house to house during the day, and make approximately 50 cents per meter. About 300-500 meters per day, and getting off work about anywhere from 1:00-2:30 p.m. (roughly 6-7 hour days) depending on the route. That's incredible money for walking and pushing calculator-type buttons on a machine, and they don't even require a college degree (why would you?) This job should be paid $8.00 per hour. I don't want to hear about the plight of the weather conditions either. They make more money than a police officer, manager, supervisor. Trust me, I'm fairly close to accurate on this one. Bottom-line: Open the books of the wages of all employees, and also what the positions starting wages are. The public will let you know if it's reasonable or not! Mathman: What's the approximate salary per year based on my calculations? "

 Hmmmm.... wrote on November 15, 2008 1:14 am:
" Actually Mathman it is even a higher percentage than that. That last increase was a straight across increase which means the businesses got hit with it too and we all know that no business is going to eat the costs and therefore they too raised their prices to compensate. But you are right in that a 9% + 4% increase actually come out to be an even higher percentage than what basic math teaches us.
Now somebody please tell me why any LES employee should be getting any payraises when the rest of the working stiffs aren't. Is it possibly so that their employees can continue to afford their electric bill? After all I hear that LES employees who are late on paying their electric bill get written up and continuation of such is grounds for dismissal. "

 OPEC wrote on November 15, 2008 5:01 am:
" Last I saw fuel was half of what it was a year ago. Where's the 10% rate reduction?
Meter readers are not burning much fuel, LES you need to conserve like the rest of us. "

 NO wrote on November 15, 2008 7:32 am:
" Your 9% was actual 30% on my bill. I can't afford anymore. Prices are down, streamline like we have to. Aquilla raised $24, my health insurance $30 I don't have it. "

 Good Try LES wrote on November 15, 2008 7:42 am:
" Still going for that 12% aren't ya. Why do you need a color full page brochure to defend your increase??? Cut your costs like all of have to. Your reason before was cost of gas, it is now @ $2 and below--so you think we are going to buy into your lame excuse now---don't think so. You are making bucks we all so that, forget the perks and parties. As a state employee I will clear $50 a month less due to insurance. When we ask for a 2% raise to break even people yell like no tomorrow. I am a secretary, I don't get perks and I can't afford it anymore. My kids were laid off and I am trying really hard to make ends meet. So your raise is not necessary. "

 ... wrote on November 15, 2008 7:57 am:
" There are no bonuses. There are no parties. There are no fat cats. It's called a GOVERNMENT job. There are NO perks to a government job. "

 Sick of LES wrote on November 15, 2008 8:00 am:
" The sad thing is we're bent over a barrel, so to speak, with our system. LES will whine and moan about not having enough money, blah, blah, blah and our City will just cave and give them what they want. It's really sad we don't have any competition in Lincoln for our utility service. We all might as well just start preparing for the increase. It is inevitable!! "

 Math101 wrote on November 15, 2008 8:28 am:
" One needs to be cautious when numbers are being bandied about. For a fair comparison the fine reporters at LJS might look at budgets, salaries and benefits from NPPD, OPPD and other public power districts in Nebraska. How does LES spend taxpayer money in relation to these other districts? An accounting of costs in neighbouring states would also be of interest to this reader. "

 John wrote on November 15, 2008 12:15 pm:
" No Parties or bonuses? ... wrote this and yet I think that person was left out of the invite, because there are parties and bonuses. Buddy, maybe you missed the boat on that one. Good try though! "

 MIKE wrote on November 15, 2008 12:35 pm:
" LES is NOT a government job it is a private and all positions at LES are civilian/private "

 ... wrote on November 15, 2008 1:01 pm:
" LES is a city owned utility! Show me where a bonus has been paid! Show me who the private entity that supposedly owns LES! Their budget is public. Read it. There are no bonuses.

Oh look, the budget review: http://www.les.com/pdf/budget_summary.pdf

And: http://www.les.com/pdf/budget_letter_review.pdf

Hey...look at that! 61% of their budget is to purchase/produce power for us to use! Imagine that! 16% of their costs is on personnel. Maybe they could save money by not buying/making power and have us sit in the dark. "

 ... wrote on November 15, 2008 1:06 pm:
" Oh, and those fuels costs that caused the last increase? They are not talking about gasoline. They are talking about natural gas and coal. "

 Huh wrote on November 15, 2008 1:47 pm:
" When will ya all learn ya live in a dictator city & state!! Ya got Osborne
and the mayor gonna build that arena come h--- & high water and they don't
care if you lost your job and are on welfare, they say HAND IT OVER!!
Other cities & states and their schools are cutting back big time, but not
in big ole Lincoln!! A friend with a family compared their utility bill
with mine, a single person, and their's was $2.00 more than mine for a
family of four, even their STOCKHOLDER utility had reduced prices!! But
LES can hide behind the stockholder senario. Other cities in other states
stock prices have dropped 20% to 50% plus fuel, but innocent LES can't
be accused of stockholder price drops!! Since they're city owned they
are like the assessors going around taking pictures of your house EVERY
year so they can accuse you of add-ons or whatever on your already over
assessed house. Talk about getting taken to the cleaners! My house
exactly the same as my neighbors, assessed at $204,000 and all my neighbor could sell their house for was $180,000. So I'm paying property tax on THIN AIR!!!! The city & state I lived in for 30 yrs,
never ONCE did an assessor come by to take a picture or question you like
your a criminal for assessment like Lincoln does. What you call job
security when it comes to the city, state & UNL!!!! "

 wrong wrote on November 15, 2008 1:53 pm:
" LES is a goverment job and there are no bonuses and no private parties. What the guy said about comparing with other companies is right if that would happen you would find LES behind HARD to believe I know but a comparable would show they are. IF you don't believe have them get one and find out then you complainers are going to have to shut up. As for LES cutting cost like EVERY ONE ELSE. I think cutting 17.4 million dollars should be enough OH WAIT that is what they are cutting. TIRED of all the whining going on. Every thing is going up complain about the price of milk or a loaf of bread all that went up. Three dollars come on don't smoke that extra pack of smokes for a day. Problem solved. "

 Quit wrote on November 15, 2008 2:27 pm:
" LES is a city goverment job, there are no parties and definetly no bonuses. As far as conserving or cutting cost I think the 17.4 MILLION dollar budget cut is conserving and cutting. If we keep wanting LES to cut cost it's only gonna effect the reliability of your electric power. They do a very good job of keeping the power flowing. The things that cause the outages are manily caused from budget cuts, you can only cut so much. It takes maoney to keep power flowing. You realy don't want Nebraska to go to deregulation where you can choose your provider, it will really cause electric rates to go up. As for wages they are public info, but you don't want to compare them to OPPD of NPPD that may cause an increse in wages. But go ahead and compare. We'll see what happens then complain about that. "

 am not buy it wrote on November 15, 2008 8:07 pm:
" Sorry LES but you won't listen, neither will the other powers that be. People are loosing homes, jobs, health care. We are all budgeting and skimming the pot, you need to also LES. You lied on the last raise of 9% which really was over 20% so what actually is this really going to be? The City Council and Mayor already told you no--fast trick you are playing LES. I hope the other powers are stupid and think we don't notice. Remember we vote you in and if you keep doing increases you have lost my vote. "

 Floyd wrote on November 15, 2008 9:27 pm:
" I have never seen such ignorant comments before in my life. None of these people have a clue as to how good they have it with LES providing their electricity.

If they only knew, most utilities around the country are having substantially higher rate increases, with already higher rates. They can thank public power for their low rates and reliable electricity.

LES has some of the lowest rates in the nation.

They should thank LES employees, not trash them. "

 Max A. wrote on November 16, 2008 3:45 am:
" Okay, Floyd if LES rates are so cheap, explain to me why LES spends so much money on advertising! There is no need for them to take out full page ads in the LJS. There is no reason for the color inserts that come with my bill. There is no reason for LES to have an advertising budget, period. We walk out of a room and shut the lights off, even if we're returning to that room in a few minutes. We can't afford the on-going rate hikes. They are not necessary! "

 To the Ones that Agree to the Increase wrote on November 16, 2008 5:06 am:
" We understand they might be the lowest in the nation but what we are saying is we can't afford it right now. Maybe if this increase was in better economic times it would be acceptable. There was an article about NPPD raising 5% due to fuel costs which we all know is not the situation anymore. Now if they can supply electricity to Beatrice and surrounding communities with a 5% increase why does LES need a total of 13%? The reason LES originally increased was due to fuel costs which again as stated before are not applicable. It's the misrepresentation that I am worried about because we all know by the math people writing that 9% was not 9% but in fact 20% and higher. It's like this, why am I paying $156 on a cable bill in Lincoln that somone pays $111 for in Omaha and another friend pays $95 for in KC??? Same company, doesn't add up does it? "

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