LINCOLN — During the LES Administrative Board meeting Sept. 18, Lincoln Electric System staff and the Board’s Budget & Rates Committee recommended no increase to retail electric rates in the 2021 budget and rates proposal.
The proposed 2021 budget totals $311.8 million, allotting $253.4 million for operating costs and dedicating the remaining $58.4 million for capital projects. This is $19.7 million less in capital projects and $16.0 million less in operating costs than 2020’s budget.
Although lower retail and wholesale sales have been forecast in 2021 than in LES’ 2020 budget, no general rate increase has been proposed due to offsetting reductions in operating and debt service expenses. This was made possible in large part by a very successful bond refinancing in early September, resulting in a $16.4 million net-present-value savings — enough to eliminate a potential rate increase.
While there is no system-wide rate adjustment proposed, minor changes to demand rates (which are revenue neutral to LES) will result in some customers seeing changes to their monthly bills. However, most customers will notice little to no change to their bill.
“2020 has been a year of unique challenges,” said Laura Kapustka, LES chief financial officer and vice president of Financial Services. “Though projected sales growth is down, especially for our commercial customers, we have been able to defer a rate adjustment for the upcoming year through a variety of ways, including debt service reductions realized from our recent bond issue. Maintaining low, stable rates for our customers remains a core value of public power. LES will continue striving to maintain affordability for the community.”
2021’s lower budget is partially due to less expenses; however, the utility’s total revenue is also projected to be lower in 2021, fueled in large part by changing power costs along with lower retail revenues.
The LES Administrative Board will take action on the 2021 budget and rates at its Oct. 16 meeting. Customers can learn more about the proposed budget and rates at a virtual public meeting Sept. 30, 12-1 p.m. All interested LES customers are invited to attend by going to LES.com/budget.