LUBBOCK, Texas (KCBD) – Lubbock Power and Light is holding its rate steady to manage the lines that bring power to homes and businesses, but the utility is changing the structure within that rate to provide more stability in its budget.<\/p>\n
For residential customers, Lubbock Power and Light is lowering what it charges per kilowatt-hour from 6.3 cents to 6 cents. The utility is also bringing back a $2.50 base charge, which had not been in place since before Lubbock moved to electric competition.<\/p>\n
Overall, the changes should keep what customers pay LP&L for its service as a lines company largely flat.<\/p>\n
Chief Administrative Officer Joel Ivy said that while he wanted to provide a rate reduction, revenues are going the wrong way. He attributed that to a combination of weather patterns and more energy-efficient appliances.<\/p>\n
LP&L representative Matt Rose said rising costs play a part, too.<\/p>\n
\u201cWe\u2019re looking at last year and looking at this year,. When we see the effects of inflation, we see the effects of weather patterns that have affected the money revenues that we come in. As we studied this year, we said we are able to hold the line on our rates even though all these outside pressures are put upon us. We can still hold our rates the same, but at this point in time, we\u2019re not able to lower our rate,\u201d Rose said.<\/p>\n
LP&L says the rate structure keeps customers in better shape than the rest of the market, but Mayor Mark McBrayer argues that is not what the utility promised, after reducing rates by two percent two years ago.<\/p>\n
\u201cNow they\u2019ve given the reasons why, they have not done that. I don\u2019t think those reasons in my mind are good enough. I think if they saw this coming, if they saw their electricity use, which the money they bring in is based on how much electricity use, if you saw that going down, then you need to go into your budget and start cutting in your budget, just like we as a city had to do two years ago when our sales tax money didn\u2019t come in,\u201d McBrayer said.<\/p>\n
Ivy said peers like Encore and CenterPoint have always had a base charge. While LP&L thought it could get away without one, he said bringing it back would account for six percent of total revenue.<\/p>\n
\u201cIt\u2019s not going to push us over the top or anything, but it solidifies a certain amount of money so that we can count on having that,\u201d Ivy said.<\/p>\n
Mayor McBrayer said he also has an issue with the fact that primary users, like PYCO and X-FAB, are getting a rate reduction of two percent. Ivy said all other rates are at the midpoint of the market, while primary rates are significantly higher.<\/p>\n
\u201cThey\u2019re about 16, 17 percent above where we really need them to be. And so we want to start stepping through time, getting them to where they ought to be,\u201d he said.<\/p>\n
McBrayer also said he does not like how LP&L is spending money the utility no longer has to pay to ERCOT.<\/p>\n