Utility raises facility fees
The Lassen Municipal Utility District is raising rates again — albeit reluctantly — but this time it’s doing so with its facility rate. This increase will bring in roughly $650,000 per year to the utility.
LMUD general manager Doug Smith told those in attendance, “I will say that by putting it in the facility charge, it makes sure that the solar customers pay, too. If you put it in the energy charge, the solar customers can avoid it because they’re generating their own energy.”
The hearing started out with information given by the utility’s staff. Smith led the conversation by telling the board, “We are seeing cost increases in a number of areas … there are more requirements put on us by the state every year, and most of them result in us spending more money. We’ve done what we can to hold costs down … but an important thing to remember that a lot of our costs are fixed costs … and we feel like the best way to cover those fixed costs is a fixed charge.”
Board member Fred Nagel inquired of Smith how LMUD’s prices compared with other local power supply companies.
LMUD public relations manager Theresa Phillips told Nagel, at the neighboring company, the Plumas-Sierra Rural Electric Cooperative, “They just had an increase and by the end of the year, it’ll be $34.99 for residential and their kilowatt-hour charge is about a penny higher than we are.”
At the July 23 meeting, the LMUD board heard from a few opponents of the facility rate’s increase. One such opponent, Norine Freely, told the board that although she wasn’t a drastic opponent, she said, “When LMUD runs short, they tack on more money to the facility fee.”
Freely told the board that she has lived in the same house by herself for eight years, with her utility bill doubling within the timeframe. Freely expressed that she couldn’t “have it double in another eight years.”
Freely then spoke about the recent decision by the California governor’s office concerning the PG&E payback on the backs of customers — assuming the facility increase was possibly due to those circumstances. Freely also addressed the future interconnection agreement LMUD is due to sign with NV Energy. She asked if the board could guarantee that rates would go back down after the interconnection with NV Energy. The board gave no such guarantee.
LMUD counsel Eugene Chittock pointed out that the utility had reduced rates in the past — at least twice in the last 10 years.
Board member Jess Urionaguena shared some of the potential benefits for the NV interconnection. One of the benefits Urionaguena detailed had to do with Cal ISO, where the utility receives transmitted energy for around 2.5 cents per kilowatt-hour.
Board member Dave Ernaga told Freely that the utility attempts to keep the lights on in the community in the most cost-effective way it can, and that if LMUD went out of business because of a financial shortfall, there would be no place to purchase power from within the area.
Another opponent of the facility rate increase, Elaine Gray, told the board, “If somebody can’t afford solar and say they go off-grid … then you guys have to charge them, because they’re not paying enough, I guess.”
“They’re not off the grid, ma’am,” said Urionaguena. He followed up by telling Gray, “If they go off the grid,” then they have no jurisdiction.
“It’s keeping the grid able to function, that we need to keep X amount of dollars for,” said Urionaguena.
He continued to explain to Gray that if they didn’t balance the cost versus the rates, LMUD would go out of business.
Urionaguena and Ernaga told Gray that LMUD is a public utility. Rather than being investor-owned, which sells electricity for profit, LMUD’s job is to keep the lights on at a reasonable and competitive rate.
There were two letters submitted from opponents of the facility rate increase. One of the was from resident Michael Justice who wrote that the proposed increase “significantly impacts low-income customers, which affects a segment of society whose portion of demand is relatively small and would result in tremendous hardship.”
Justice instead proposed LMUD consider additional rate structure changes before approving the facility increase. They also proposed LMUD adopt a service called Time of Use to incentivise energy usage when the demand costs less.
Another resident who submitted a letter to the utility came from Marjorie and Franz Lattka, who wrote “With your present $20 fee, that increases our bill by one third equaling $60. We would be OK with you increasing your fee by $5, but find it unreasonable for you to raise it more.”
There were no proponents present at the public hearing.
The board ultimately decided to vote unanimously for the increase, but not without hesitation. Many of the board members gave their vote “reluctantly” to the facility charge increase including David Hagata, Nagel, Bud Bowden and Urionaguena.