LINCOLN — Lincoln Electric System staff and its board’s Budget & Rates Committee recommended no overall increase to retail electric rates in the 2019 budget and rates proposal during the LES Administrative Board meeting Sept. 21, 2018.
LES proposed a 2019 budget of $348 million, with $272 million for operating costs and the remaining $76 million for capital projects. This is $14.5 million less in capital projects and $1.4 million less in operating costs than 2018.
Customers will continue enjoying electric service ranked nationally for both affordability and reliability. Large commercial customers should expect similar bills in 2019 while Residential, General Service and Heating Service customers will see slight changes in the form of LES’ ongoing rate restructuring. In 2019, the revenue-neutral restructuring will appear as a decrease in the Energy Charge (customers’ variable charge for energy usage) offset by an increase in the Facilities Charge, which collects fixed costs for LES to maintain and deliver energy.
Bottom line, most customers will see little to no change in their bill.
“We are pleased, for the second year in a row, to share with our customers that there will not be an increase in electric rates,” said Vice President and CFO Laura Kapustka. “We will continue to focus on restructuring rates to better account for the fixed costs of getting power to homes and businesses.”
Electric rates in Lincoln rank among the most affordable in the nation and LES continues to be among the nation’s leaders in reliable service. LES’ 2018 National Electric Rate Study — surveying the rates of 100 electric utilities in different cities across the country — determined that LES’ average rates are the eighth lowest. Residential customers pay an average of $96.42 for 1,000 kilowatt-hours on their monthly LES bill, which is 31 percent less than the study average of $139.98. Meanwhile, industrial customers using 1,000 kW and 400,000 kWh in a month pay $31,080 on their LES bill, which is 23 percent less than the study average of $40,614.
The changes to the Facilities and Energy Charges for Residential, General Service and Heating Service customers are a continuation of LES’ multiyear efforts to better account for fixed costs. Like many other utilities, LES is working to collect for the fixed costs of delivering electricity — including billing, meter service, poles, power lines, substation expenses, transformers and underground duct — through fixed charges, identified as the Customer and Facilities Charges on LES bills. Meanwhile, the Energy Charge for customers’ usage covers the variable costs of delivering electricity, such as fuel and maintenance for power generation facilities.
The proposed monthly Facilities Charges for Residential customers are $18 for Level 1 customers (using 0-799 kWh), $26 for Level 2 (800-1,500 kWh) and $40 for Level 3 (1,501 or more kWh). The proposed residential Energy Charges are dropping to $.0801 per kWh in the summer (June-September) and $.0548 per kWh in the winter (October-May). Proposed Facilities and Energy Charges for General Service and Heating Service customers are reflected in the proposed rate schedules which will be posted on LES.com Oct. 1, 2018.
The LES Administrative Board will vote to approve the 2019 budget and rates at its Oct. 19, 2018, meeting, but customers can learn more about how it may impact them at a public meeting 6-7 p.m. Oct. 4, 2018, at the Walter A. Canney Service Center (2620 Fairfield St.).