The Lincoln City Council should resist the feel-good impulse to trim the 2.9 percent rate increase proposed by the Lincoln Electric System.
The publicly owned electric utility is one of the most important elements in the community's basic infrastructure, as important to the economy and quality of life as water mains, sewers and roads.
It's crucial to keep the utility in good working order, even when times are tough. Some expenses are more important than others. Just like a family should replace bald, worn-out tires on the family car, a community should keep its electric utility up-to-date and in good repair.
So far in the process, no one has identified realistic spending cuts in the LES budget.
The three LES board members who voted in the minority against the rate increases failed to offer any specifics on what to cut. They explained their votes in generalities. One board member said he didn't want to increase people's misery, but avoiding unpleasantness is no way to prepare for the future.
The Lincoln Independent Business Association at least offered some ideas. Unfortunately the ideas were shortsighted.
LIBA wanted to reduce contributions to the LES rate stabilization fund. But the need for an adequate cushion in that account was demonstrated when an ice storm hit central Nebraska in 2006. LES had nearly $10 million in unexpected expenses. A temporary 5.5 percent surcharge was necessary.
Better to keep a cushion. Imagine the misery ratepayers would feel with a surcharge in today's economy if another calamity struck.
LIBA also wanted to cut funds for the energy conservation program. But that ignores the cost-saving impact of the program. First, by helping ratepayers reduce their use of electricity, the program saves them money.
Just as important, by reducing demand for electricity, LES can get by longer without investing hundreds of millions of dollars in new generating capacity. LES officials have calculated that a year delay saves $10 million. Sometimes mistakenly characterized as an advertising program, the energy conservation program includes incentives for installation of energy-saving devices, as well as an array of outreach efforts, such as business and residence walk-through audits.
It's important to remember that only 15 percent of the LES budget goes for salaries. The rest of the budget covers the cost of generation and maintaining power lines. And every year LES gets new customers, even in a recession. The number of LES employees is down by one from five years ago.
LES had delayed a 4 percent rate increase it originally had scheduled for March 1 of this year.
Now the Lincoln City Council should accept the 2.9 percent proposed rate increase approved by the administrative board.
With rates that already are among the lowest in the country, it's a small price to pay for a continuing dependable supply of electricity.
Posted in Editorial on Saturday, October 31, 2009 11:55 pm Updated: 6:47 pm.
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