Aug. 17, 2007

 

The LES Administrative Board held its regular monthly meeting Aug. 17 at the Lincoln Electric Building. Items from the meeting, as well as other pertinent information, include:

 

For 20th Consecutive Year, Survey Shows LES Rates Among Nation’s Lowest

For the 20th consecutive year, a nationwide study of 106 cities ranks the rates paid by Lincoln Electric System (LES) customers among the lowest in the country, Rich Andrysik, utilities manager of the Rates, Forecasting and Load Research department in Consumer Services, told the LES Administrative Board Aug. 17.

 

The annual survey compared electric bills at various usage levels and revealed LES’ electric costs are among the lowest for all classes of customers. LES rates remain unchanged since the last survey was conducted one year ago. The last rate change was a 4.5 percent rate increase implemented in February 2006. The bills for the other 105 utilities reflected electric rates that were in effect on Jan. 1, 2007. The survey revealed LES’ bills ranked 9th lowest, overall. Residential electric bills were 7th lowest and commercial and industrial bills, 11th lowest.

 

Residential customers using 1,000 kilowatt-hours (kWh) pay $60.95, or 41 percent less, than the survey average of $102.86. The city in the survey with the highest rate was Cambridge, Mass., where the rate for the cost of electricity for this category was $201.15, and the lowest was Boise, Idaho, at $51.54.
LES industrial customers using 1,000 kilowatts (kW) and 400,000 kWh pay $20,680, or 36 percent less, than the survey average of $32,344. The survey found the rates in Bridgeport and New Haven, Conn., are highest in this category at $74,745, while Boise, Idaho, had the lowest rate at $11,475.

Regionally, compared to seven Midwestern cities, the electric rates in Lincoln are the lowest in four of 12 categories. Cities in the regional comparison include: Omaha; Kansas City, Mo.; Kansas City, Kan.; Wichita, Kan.; Colorado Springs, Colo.; Minneapolis, Minn.; and Des Moines, Iowa.

Andrysik said the 2007 rate study revealed that 55 percent of the utilities included reported rate increases. Even with the February 2006 rate increase, the rates paid today by LES customers are just 28.5 percent higher than rates charged twenty years ago, while the Consumer Price Index has increased by almost 84 percent since that time.
 

Andrysik said LES’ low rates can be attributed to the following:

• Low operating costs at power plants supplying electricity, which account for about 70 percent of LES' costs to provide electric service to customers. A diverse mix of efficient energy sources, using coal, water, renewable, oil and gas, helps keep energy production costs low.

• LES power plants have operated well, supplying consistent power with few repair costs.

• Nine large, local business customers participating in a program that helps reduce power use at peak times, which also helps keep LES' costs low. Combined, the businesses in aggregate provided about 3 megawatts of energy reduction when needed.

• LES has low-cost financing because bonds and commercial paper notes receive high ratings, enabling LES to borrow money at lower interest costs. In 2005, LES’ $625 million in electric revenue bonds were rated: Fitch, AA; Standard and Poor’s, AA+; and Moody’s, Aa2.

Demand, Energy Lower in Long-Range Forecast

Slower economic and population growth has resulted in a slightly lower forecast of customer demand and energy use, said Rich Andrysik, utilities manager of the Rates, Forecasting and Load Research department in Consumer Services, at Friday’s (8/17) meeting of the Administrative Board.

The annual long-range forecast of Lincoln-area load shows the projected increase in energy use for 2005-2015 at 2.1 percent, down from a 2.5 percent annual increase expected last year. Customer demand also was slightly lower at 1.8 percent, down from a 2.1 percent annual increase in 2006 projections.

Customer growth is anticipated to increase about 2,000 and is projected to trend lower in the future, Andrysik said.

While residential and commercial classes continue to grow, the analysis found that the number of industrial and government customers has been flat since 2000.

The effect of weather on demand projects a peak of 787 megawatts (MW) in 2007, based on 30 years of historic data. Applying the hottest year to the forecast could result in a peak of 832 MW this year.

The Rates, Forecasting and Load Research department makes the annual forecast using a highly-detailed econometric model that is used by Power Supply, Financial Services and Engineering. Variables in the forecast include population, weather, income, unemployment and the price of electricity.

 

Overhead to Underground Projects Completed, Slated

 

Overhead lines along three streets were placed underground in 2006, and 2007 and 2008 will each see lines buried along two streets, reported Dan Pudenz, vice president of Engineering.

The program was created in response to the Lincoln-Lancaster County Comprehensive Plan that states, “within the City of Lincoln, wherever feasible and affordable, implement a phased program to relocate overhead utility lines underground.” About $500,000 has been budgeted to bury overhead lines along main arterials since 2006, when the program began.

Last year, overhead lines were buried along the following streets:

• Vine St., 40th-52nd

• K St., 10th-11th

• 27th St., Everett-South

Slated for completion in 2007:

• Vine St., 66th-72nd

• South St., 57th-66th

Projects identified for 2008 include the following:

• 70th St., O-Vine

• South St., 66th-70th

Areas were selected based on the age of poles and lines, street classification, traffic speed and volume, whether the street is an entrance corridor, distance of poles from the curb, property owner disruption, current and future right-of-way issues, coordination with other utilities, long-range street, water and sewer plans and location of arterial street rehabilitation, water, or sewer projects.

 

Other Reports

 

July 2007	July 2006	Change
Number of Customers
125,829	124,360	+1,469 (+1.2%)
Retail Electricity Use (MWh)
326,105	332,916	+6,811 (-2.0%)
12-Month Average Outage Time/Customer (minutes)
24.2	18.6	+5.6

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