Jan. 19, 2007

 

The Lincoln Electric System Administrative Board held its regular monthly meeting Jan. 19. Items from the meeting, as well as other pertinent information, include the following:

 

Central Nebraska Ice Storm Has Financial Impact on LES

Although the last Lincoln Electric System (LES) crew members return Saturday (1/20) from Central Nebraska after helping to restore electric service, the impact of a late-December snowstorm will continue to be felt by LES for months to come in higher power costs.

The snowstorm downed transmission lines that bring electricity to LES from Laramie River Station, near Wheatland, Wyo., and Gerald Gentleman Station, near Sutherland. About 60 percent of LES’ annual energy needs are provided by the two power plants, but only 40 percent of their normal output is reaching LES, said Terry L. Bundy, LES administrator and CEO.

The resulting shortage of energy has forced LES to buy or generate electricity at a significantly higher cost to meet the needs of its customers, he said. Customer demand for electricity has been high in the face of recent low temperatures.

“We are concerned because the additional cost to provide electricity to our customers amounts to $80,000 or more a day above the cost of producing power at Laramie River and Gerald Gentleman,” Bundy said. “The cost to date is about $2 million. We are concerned about the duration of these transmission outages and our ability to absorb these higher costs without seeking a rate increase.”

He said Nebraska Public Power District (NPPD) is doing all it can to replace transmission towers and return lines to service. “They recognize the impact of the loss of this vital service on our customers,” he said. “The unfortunate fact is that with the devastation, it could take months to fully return all transmission lines to service.”

That will mean ongoing higher power costs, he said, although as lines are brought into service, LES will see more electric energy available from the west.

“It’s early in the year, and we will be closely monitoring our financial status,” he said. “This isn’t how we planned for the year to start.”

He noted that while much of the repair costs will be covered by the Federal Emergency Management Agency, no disaster aid programs pay for added power costs.

LES Labor Costs for Central Nebraska Cleanup Total $300,000

LES crews have worked 5,637 hours and amassed labor costs totaling more than $300,000 while working to restore electric service in Central Nebraska, said Neil Engelman, vice president, Operations.

And, that amount does not include the added cost of benefits, time for the use of trucks and tools, motel rooms and other costs, he said. The utilities requesting assistance will reimburse LES for the costs.

Engelman said 45 LES employees helped four electric utilities restore electric service to customers over the last three weeks as part of an agreement to assist other utilities when disaster strikes.

“In October 1997, LES was on the receiving end of that assistance when 13 inches of snow dropped service to half our customers,” said Terry L. Bundy, LES administrator and CEO. “I, and especially the employees returning from the recent work in Central Nebraska, am gratified we can return the favor for the long hours they spent helping our customers.”

Five employees returned to Holdrege Tuesday (1/16) to help switch electricity from generator power to utility service as NPPD reconstructed a line to the city. They are the final LES employees still working in Central Nebraska.

A crew of eight returned to Lincoln Tuesday (1/16) from Southern Power District in Grand Island, where crews had worked 15 days. Twin Valleys Rural Public Power District, headquartered in Cambridge, released LES employees Monday (1/15) after helping the utility for 16 days. Previously, Loup Public Power District released LES employees after working five days with the utility.

The crews typically worked 16-hour days and were replaced each week.

“The customers and the utilities where LES crews worked were very appreciative of our employees’ work,” Bundy said. “Our employees left Lincoln anxious to help restore electric service to residents in Central Nebraska as quickly as possible, and they received heart-felt thanks from everyone. We can be proud of their hard work and dedication.”

 

LES to Hold Hearings on PURPA Standards

A public hearing on staff recommendations for the adoption of the 2005 Energy Policy Act Amendments to the 1978 Public Utilities Regulatory Policies Act (PURPA) will be held by the Administrative Board on Tuesday, Feb. 20, at 7 p.m. at the Service Center.

The Board will consider public comments in May and its decision will be forwarded to the City Council for action by July.

Amendments under consideration are time-based metering and communications, interconnection standards, net metering, fossil fuel generation efficiency and fuel source reliance.

LES staff is further recommending consideration of a standard presented in 1981 concerning information to consumers.

PURPA became law in 1978. Amendments to PURPA have subsequently been considered in 1981, 1992 and 2007. The primary purpose of the act is to encourage conservation of energy supplied by electric utilities, the optimization of efficiency of use to facilities and resources by electric utilities, and equitable rates to electric consumers. LES has considered a total of 21 PURPA standards since 1978.

Board Elects 2007 Officers

The Administrative Board elected Ron Melbye chair, Kathy Campbell vice chair and Dawn Rockey secretary at its January meeting Friday (1/19).

Ron is a sales and account representative at Ayars & Ayars, Inc. He also serves as mayor of Waverly. Campbell is executive vice president of the CEDARS Home for Children Foundation. Rockey is executive director of Court Appointed Special Advocate for Children (CASA for Lancaster County).

Ron, who has served as Board vice chair and secretary, begins the second year of his second term. Kathy, who was secretary, has been reappointed and starts the first year of her second term on the Administrative Board. Dawn is entering the third year of her first term.

New Board Members Seated at Meeting

Marilyn McNabb and Antonio (Tony) Marquez, Jr. were seated as the newest members of the LES Administrative Board. Their terms expire in December 2009. They fill the vacancies created by the departure of Mike Ayars and Jerry Shoecraft.

Marilyn is a legal counsel in the office of the Nebraska Ombudsman and a member of the Wachiska Audubon board of directors, Mayor’s Floodplain Task Force, State Advisory Council of the Nebraska Dispute Resolution Office, County Ecological Advisory Committee and the Mayor’s Environmental Committee.

Tony co-owns TMCO, Inc., a local machine shop and manufacturer. He is a member of the Sunrise Optimist Club board, Optimist Youth Sports Complex board and has worked with the Boy Scouts.

 

Other Reports

The following statistics for December 2006 were presented to the Board:

 

December 2006	December 2005	Change
Number of Customers
124,887	123,385	+1,502 (+1.2%)
Retail Electricity Use (MWh)
253,029	264,353	-11,324 (-4.3%)
12-Month Average Outage Time/Customer (minutes)
15.4	23.5	-8.1

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