LMUD raises rates by one-half cent

“Happy New Year and Merry Christmas,” grumbled Lassen Municipal Utility District President Fred Nagel as the publicly owned utility district board of directors considered raising its rates by one-half cent per kilowatt-hour at its Tuesday, Nov. 28 meeting — the fifth increase LMUD customers have faced since last December. In the end the board unanimously approved the rate increase.

The Lassen Muncipal Utility District Board of Directors ponders a rate hike at the board’s Tuesday, Nov. 29, meeting.

Last December residential customers paid 14 cents per kilowatt-hour, and as of the Jan. 10, 2024 billing, the rate has soared to 19.5 cents — a whopping 39.3 percent increase in little more than a year.

The board considered a recommendation from staff regarding the district’s Power Delivery Cost Analysis Worksheet which showed the district was under collecting by .398 cents per kilowatt-hour.

According to Catherine Schroeder, LMUD’s accounting and finance manager, this is the third consecutive month the PDCA numbers have shown the need for a rate hike.

“What’s happening is, this PCDA is October 2022 through September 2023,” Schroeder explained, “so those months of lower purchased power are falling off and what we’re seeing here is basically the 11 months of our higher purchase power costs. The first one hit in November (2022).”

She said she wanted to avoid waiting a year and a half to initiate a needed rate increase as the district had in the past.

“That didn’t work out so well,” she said.

Nagel wondered if there would be any relief when the big contract went out on the Skedaddle project, and the district possibly could move some of that money into its reserves to offset potential rate hikes.

It may turn out to be possible, but that’s a future unknown that can’t be determined at this time.

Dominguez said the rate increases normally go into effect in the next billing cycle, but he suggested it would be more appropriate to give customers notice now so they would know the cost of the power they’re using over the holidays.

LMUD press release on rate increase
During the Nov. 28, board meeting, the Lassen MUD, Board of Directors approved a half-cent increase to the district’s kilowatt-hour charge. The increase will be effective with the Jan. 10,  billing cycle, bringing the charge to 19.5 cents per kWh. Customers will see the increase on the January bill, which encompasses December usage.

The increase was based on the district’s Power Delivery Cost Analysis spreadsheet, which indicated that LMUD is under-collecting by nearly a half-cent per kilowatt hour.

The PDCA is a tool used by LMUD to analyze the cost associated with running the district. It takes into account expenses and revenue and uses that information to determine whether rates are sufficient to keep the district financially stable.

If the indication shows under collection, the District’s policy allows the board to increase rates by no more than a half-cent per quarter. Increases are voted on by the board and must receive a majority vote to pass. The Nov. 28, increase was approved by a unanimous vote.

Typically, LMUD’s average customer uses about 800 to 1,000 kilowatt-hours per month. A half-cent increase can mean about four to six dollars more per month for the average customer.

However, usage can be higher during the holidays and winter months, which means a rate increase may have a greater effect during times of high usage.

For tips on decreasing energy use visit energystar.gov or call LMUD’s energy experts at (530) 257-4174.

If you are experiencing a higher-than-normal bill, reach out to our customer service department, we may be able to assist you with payment arrangements, or financial aid, depending on your circumstances.