Small Town News

Utility rates remain unchanged

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The Lassen Municipal Utility District did not raise the rates it charges its customers for electricity at its Tuesday, Sept. 22, meeting.

The district reviews its rate structure quarterly through the Product Delivery Cost Analysis mechanism.

The board unanimously approved keeping the rates the same. Director Jay Dow was absent.

With a cash increase of $82,879.96 over last year at this date, LMUD Controller Bill Stewart said, "There is no need to increase the rates at this time."

Stewart told the directors the publicly owned utility district paid $1.2 million to the Western Area Power Association for the month of July. WAP A purchases power for the publicly owned utility district." He said WA-PA purchased more expensive power for LMUD due to the uncertainty over state regulatory requirements that never materialized.

Stewart expects the district will soon receive a $200,000 rebate on those costs, bringing the wholesale cost of the power purchased in July down to around 7 cents per kilowatt-hour from the 9 cents originally billed.

Ray Luhring, LMUD's general manager, explained WAPA had already purchased a block of cheaper power for the district for next year to take advantage of lower wholesale prices, so the district also will recover some of those costs though cheaper power next year.

Director Wayne Langston said the district hasn't raised its rates in 15 months, since June 2008.

Langston credited management, staff and the board's decision-making for holding the rates steady.

"We must be doing something right," said Director Bud Bowden.

Director Richard Vial asked when the board might decide to lower the rates it charges its customers. Stewart said it was a board decision that might be appropriate if "we start tripping over cash."

Board president Fred Nagel noted the district's positive cash flow is due in part to the suspension of contributions to the rate stabilization fund. The board suspended contributions to that fund Dec. 23, 2008. It set a $6 million goal Sept. 19, 2006, raising the fund amount from $3 million.

The fund currently has a balance of $4.5 million, but the board originally intended to bank $6 million to help rate payers avoid rate increases in troubled financial times.

Nagel suggested the board might want to resume contributions to the rate stabilization fund before considering lowering its rates.



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