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Utility's power cost may rise by $1.15 million

June 3, 2008 — The Lassen Municipal Utility District’s Board of Directors were told the district faces a $115 million increase in the cost of electricity next year. Bill Stewart, LMUD’s controller, presented the information to the board at a special meeting and budget workshop held at 1 p.m. on Tuesday, May 27.

The board made no decision about how to deal with the increased cost, but will discuss the budget again at the board’s next regular meeting scheduled for Thursday, June 19.

Stewart said the budget document he presented was “a working document” and was based on power purchase projections provided by the Western Area Power Association.

According to Stewart’s figures, the district projects the $1.15 million increase in its proposed budget for fiscal year 2008-2009.

When directors Jay Dow and Fred Nagel asked about the increase, Stewart said, “In my opinion, we’re falling behind.”

Director Wayne Langston said he didn’t see the district’s income increasing, but it appears the district’s expenses are increasing quite a bit.

“Our income is not going to go up,” Langston said, “but our bills are.”

Dow wondered if there was any way to increase the district’s revenue without raising its rates.

“We need to spend less money or sell more power,” Dow said.

Nagel noted if the district charged an additional 1 cent per kilowatt-hour, it would amount to about $1.3 million in additional revenue during the course of the year.

“It looks to me like we’re already about half a penny behind,” Nagel said.

As part of his presentation, Stewart gave the directors a chart comparing the rates charged by other utility districts.

The chart projected what customers would pay for 100 kW hours of power — including the cost of power, miscellaneous and public benefit charges and meter or customer charges.

According to Stewart’s figures, Surprise Valley would charge $69, TDPUD would charge $134.56, Sierra Pacific would charge $141.14, LMUD would charge $143, with a half-cent increase, LMUD would charge $148, PSREC would charge $156.90 and PG&E would charge $177.55.

The projected budget includes total operating revenues of $20.4 million and power purchases of $12.8 million.

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