LMUD board holds special meeting on 'incentives' for large customers
Dow’s idea is to have the large customers pay the cost of running new lines to their facilities. Once the customers started using electricity, they would be charged only the “direct cost” of power, allowing them to recoup the cost of building the power lines. According to Dow’s proposal, the incentive could run for as long as three years.
But Dow made it clear he didn’t want to establish any policy that would hurt LMUD, and there were still a number of details regarding his proposal that needed to be explored.
“I’d liken this to what communities do to entice new businesses in, community development-type things, in economic incentives to bring new customers into an area,” Dow said. “If we can entice new load, new customers into this district … I think we ought to do it … Anytime we can add big loads, I think it’s beneficial.”
Director Fred Nagel noted Dow’s figures were based on LMUD’s total melded power cost. He said the district would have to purchase higher-priced energy on the open market to service the new customers.
“The more energy we purchase, the higher the rate goes,” Nagel said.
Dow said he disagreed with the philosophy the district shouldn’t try to sell more power. He called that idea “ludicrous.”
Nagel responded he basically said the same thing about five years ago.
“What I’d like to propose is a policy that works regardless of what our energy costs are, regardless of what our line extension costs are,” Dow said. “Essentially it would have to be revenue neutral to LMUD for the period.”
Other board members asked about how this incentive could be applied to new residential customers or developers building a new subdivision.
“The question came up, ‘Why wouldn’t we apply these to homeowners?’ And we could very well, but realize homeowners already have a number of public benefits programs in place which essentially subsidize them to some extent right now,” Dow said. “They pay for that in their rates.”
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