Feb. 16, 2007

 

The Lincoln Electric System Administrative Board held its regular monthly meeting Feb. 16. Items from the meeting, as well as other pertinent information, include:

 

Board Asks City Council for 5.5 Percent Surcharge

 

Faced with more than $3 million in replacement power costs in January alone, the Lincoln Electric System (LES) Administrative Board at its meeting Friday (2/16) passed a resolution asking the Lincoln City Council to declare an emergency and approve a 5.5 percent surcharge effective with bills rendered on and after March 1.

 

Since the waning days of 2006, when a severe ice storm downed 37 transmission lines in Central Nebraska, LES has purchased and generated higher-priced electricity to make up for energy unavailable from its two least-cost power plants west of the storm-damaged area; Laramie River Station near Wheatland, Wyo., and Gerald Gentleman Station near Sutherland.

 

If approved, the surcharge is expected to generate about $9.4 million by Dec. 31, if not sooner. That’s the estimated cost to LES to buy and generate higher-priced electricity by the time Nebraska Public Power District (NPPD) expects its transmission system to be repaired by June 1. The impact of the surcharge on the typical residential customer will be approximately $4 per month. The surcharge would be lifted before the end of the year if the necessary funds are realized sooner.

The daily increased costs to buy and generate energy are averaging $100,000 a day or more.

The emergency declaration is also necessary before LES sells bonds this spring to fund its near-term construction costs, including the completion of the Council Bluffs Energy Center Unit 4. In order to achieve the lowest interest rates, LES must have a plan in place to recoup these high additional power costs before it approaches the bond market.

The City Council is expected to act on the request at its Feb. 26 meeting.

LES Administrator and CEO Terry L. Bundy said NPPD has completed about half the repairs on its system already, and it appears the utility continues to make good progress.

 

2006 Outages Second Lowest in History

 

In 2006, Lincoln Electric System (LES) customers experienced the second lowest average outage time in history, according to Vice President of Operations Neil Engelman at Friday’s (2/16) meeting of the Administrative Board.

 

The total average amount of time LES customers were without electricity in 2006 was 18.3 minutes, he said. The record low occurred in 2000 with 10.8 minutes, which Engelman said is highly unusual. The 2006 average outage minutes are 14 minutes less than the five-year average.

Electrical outages caused by nature comprised 55 percent of outages in 2006, he said, representing the largest category of reasons why customers lost electric service. The largest single cause of outages was squirrels at 97. The five-year average of squirrel-related outages is 98.

Tree limbs falling into electrical lines totaled 38, and were half the number of outages that occurred in 2005 for the same reason. Lightning accounted for 37 outages, and birds and wind caused 18 outages.

LES tree trimming crews visit trees near power lines about every four years to cut away branches that could fall and cause an outage, Engelman said.

The second highest reported reason for outages was underground cable failures with 47 during 2006, although that number typically HAS have occurred each of the past five years. He said outages on underground lines take longer to find and repair.

“Every year, our engineers evaluate all failures and note any trends in case LES needs to replace cables that are nearing the end of their life expectancy,” Engelman said.

 

Of the 348 total outages in 2006, 91 were instantaneous.

The report also indicated that customers on average could expect an outage to affect them only once every three years. That period between average outages per customer was a new record.

Pointing out that the average outage time per customer is more than 40 minutes below LES’ service reliability goal of 60 minutes or less, Engelman added that the total outages in 2006 were 153 outages below the five-year average.

Vehicle accidents caused 10 outages, half the number in 2005. Accidental cuts of underground lines totaled 10, which continues a downhill slide since hitting a peak of 25 outages in 2004. LES educates the public and contractors about calling the Diggers Hotline at 1-800-331-5666 before digging to request that utilities locate underground lines, he said.

Engelman said LES also uses an infrared thermographic scanner to identify equipment that may be about to fail, and could cause an outage. In 2006, scans of equipment identified 301 potential equipment problems that were fixed or continue to be monitored, which avoided an outage or a probable longer time that customers would have been without electricity.

“Together, LES’ tree trimming and infrared programs have been successful in reducing the number of outages caused by trees and loose connections and failing equipment,” he said. “Of all the uncertainty the weather throws at us, these are situations that we do have some control over.”

 

LES to Hold Hearing on PURPA Standards Feb. 20

 

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.

 

Results of 2006 Power Purchase Program Reported

 

Nine customers agreed to curtail their demand for electricity three times in July 2006, said Vice President of Consumer Services J. Todd Hall at the February LES Board meeting. The demand reduction during system peak was 3.3 megawatts, and the participants received a total of $6,481. Those who participated include the following:

• Archer Daniels Midland

• District Energy Corporation

• Lancaster County Youth Services Center

• Lincoln Airport Authority

• Nationwide Insurance

• Nebraska Department of Roads

• Nebraska Heart Hospital LLC

• Nebraska Wesleyan University

• UNL Police Station

Board Members Assigned to Committees

Administrative Board Chair Ron Melbye announced committee appointments at the February Board meeting. The Board chair is an ex-officio member of each committee.

 

Personnel & Organization Patty McManus, Chair Ron Ecklund Richard Evnen	Finance & Audit Ron Ecklund, Chair Tom Schleich Dawn Rockey
Operations & Power Supply Tom Schleich, Chair Richard Evnen Tony Marquez	Budget & Rates Ron Ecklund, Chair Kathy Campbell Tony Marquez
Legislation & Governmental Affairs Dawn Rockey, Chair Kathy Campbell Marilyn McNabb	Communications & Marketing Kathy Campbell, Chair Patty McManus Marilyn McNabb
Labor Negotiations Ron Melbye Tom Schleich

Other Reports

 

The following statistics for January 2007 were presented to the Board:

 

January 2007	January 2006	Change
Number of Customers
125,339	123,658	+1,681 (+1.4%)
Retail Electricity Use (MWh)
270,814	242,489	+28,325 (+11.7%)
12-Month Average Outage Time/Customer (minutes)
15.8	24.6	-8.8

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