LINCOLN — The Lincoln Electric System Administrative Board’s Budget & Rates Committee proposed a budget that includes a 3.7% systemwide increase to retail electric rates during LES’ Administrative Board meeting today. The rate adjustment is primarily due to ongoing investments in recruiting and retaining LES’ critical workforce. The rate adjustment is also driven by increases in net power costs and debt service.
“It is a priority of LES to keep costs low for customers while delivering safe, reliable and affordable service,” said Emily Koenig, LES vice president of Financial Services & chief financial officer. “The key drivers of next year’s proposed budget and rates are investments in our highly skilled workforce and electrical infrastructure.”
A typical residential customer using 1,000 kilowatt-hours per month will see an increase of approximately $4 on their monthly bill, or 3.7%, if the rate increase is adopted. Other rate classes would see increases varying from 2.1% to 7.8% based on the cost to serve each customer class.
While some cost reductions have been included in the proposed budget, it is necessary to implement a rate increase to ensure the ongoing financial health of our customer-owned electric utility. Like other Lincoln-area businesses, LES is navigating the changing labor market, and continues to focus on its strategic priority of being an “employer of choice” in the community. Power costs and debt for infrastructure are incurred to reliably generate and deliver electricity to the community. While net power costs are up $2.3 million and scheduled debt service payments are up $3.6 million, LES has limited ability to impact these costs. Higher interest rates on invested cash are leading to a $4.4 million increase in interest income, which helped reduce the overall rate adjustment.
The total proposed 2024 budget of $362 million includes the operating budget of $283 million and the capital budget of $79 million. LES’ 2024 Sustainable Energy Program funding is planned at $2.5 million, $1 million more than 2023, providing financial incentives to encourage residential and business customers to make energy-efficiency improvements.
“Understanding that all LES customers are experiencing cost increases, LES took measures to cut $11.1 million from the original budget submittal, resulting in a lower rate increase for customers,” Koenig said.
Customers can save money, help LES reduce the need for energy during expensive peak periods, and delay the need to build additional high-cost power plants to serve the Lincoln area.
A public meeting on the proposed LES 2024 budget and rates will be held Oct. 5, 6-7:30 p.m. at the LES Operations Center, 9445 Rokeby Road in Lincoln. Customers can join virtually through a link, view materials and watch the meeting recap at LES.com/Budget. LES staff will also meet with customers and customer groups in October to provide information and receive feedback on its proposed 2024 budget and rates.
Board action on the budget is planned to occur at its Oct. 20 meeting. If approved by the LES Administrative Board, the proposed budget and rates will be considered by the Lincoln City Council at a public hearing in November. If approved, rate changes will become effective Jan. 1, 2024.
Business and residential customers can use LES’ online rate calculator to see an estimated bill with the proposed rate, found at LES.com/BillCalculator. Payment assistance options can be found at LES.com/FinancialAssistance or by calling LES at 402-475-4211.