Public utility holds off on rate increase for now

The Lassen Municipal Utility District will reschedule talks surrounding the possibility of a facility rate increase until after the new year.

LMUD held discussions surrounding a facility rate charge increase at a Dec. 20 meeting. Talks came just one month after approving an increase to its kilowatt hour commodity charge from 13 to 13.5 cents after the utility’s quarterly Power Delivery Cost Analysis worksheet revealed that LMUD under-collected revenue by approximately $.00386 per kilowatt-hour through the 12 months ending Sept. 30.

As per California Public Utilities Code § 14401, before any rates and charges for commodities or service furnished by a district are fixed or changed, the general manager shall file with the board a report and recommendation in writing. At the December meeting, general manager Doug Smith did just that.

In his report, Smith wrote, that in addition to the PCDA’s findings, “The board was informed that there have been some extraordinary, unbudgeted costs that were not reflected in the PDCA,” which have resulted in “a sudden reduction of cash reserves of approximately $4.5 million.”

In Smith’s report he recommended a facility charge increase of $5 to the current $20 charge, a $7 increase to the $35 charge and a $10 increase to the $240 facility charge.

If the board were to have moved forward with the procedure, there would be a call to hold a public hearing within the 40 days following the motion. However, since the board decided to not move forward until more information was available, Smith will bring another 14401 report to the board at a future meeting.

At the undeclared, future meeting, the utility will project the action of its increase to the commodity charge. It will also have another upcoming PCDA at its February meeting, which will also provide opportunity to look at the effects of the charge rate increase before making the decision.

Board president Fred Nagel discussed his interest in seeking demand charges in lieu of a facility rate increase. Both Smith and assistant manager Patrick Holley detailed that it would be difficult with the current capabilities of data collection.

Holley told the board, “I think when we get fully implemented on the AMI, it will allow us to collect the data a lot more accurately for the demand calculation … right now we would have to make a lot of estimates.”

Nagel said what he was referencing was what a “sort-of” demand charge, relying on charging for “horsepower.”

Electric operations manager Cort Cortez pulled the information concerning usage off of the utility’s site, “If your usage on a meter is over 15,000 kilowatt hours for three consecutive months, then you go into a demand charge.”