LPEA ‘rate’ increase is misleading
To the editor,
LPEA’s news release announcing “preliminary approval for a rate increase of 3.3 percent” is misleading; it is not a 3.3 percent increase for many customers and it is not a “rate” increase.

Electric utilities like LPEA split their expenses and revenues into two accounting categories: product and services. The product is the electricity and is the “rate” portion of our bills. It is proportional to consumption; use less electricity and your bill goes down. The second category, services, is the “base charge,” a fixed monthly fee on our bills that reflects the cost associated with distributing the electricity. It is independent of consumption; use less electricity and your base charge remains the same.

LPEA’s proposed increases are going to be applied primarily to our base charges; in fact LPEA has proposed no “rate” increase for residential consumers. But because base charges are independent of consumption, the proposed increases are discriminatory and regressive; residential customers who save energy and use the least amounts of electricity will have increases of over 16 percent. Customers who have invested in efficiency upgrades or net-metered solar power will see their investments financially marginalized.

While the biggest consumers will barely see any changes to the bottom lines on their bills, the greatest impacts will be on those who can least afford them. The widow on a fixed income (one of my neighbors) and the single mom (another neighbor) who conserve electricity to save money will bear the brunt of these increases.

The “small commercial” base charges, the ones most small businesses pay, will increase an average of more than 11 percent. The monthly base charge for a small 4 office in town can already be three times greater than the cost of its electricity use.

Like other public entities, LPEA should make the rationale for its decisions open and transparent. Justification for the base-charge increases was a “Cost of Service” study done several years ago. This study will not be released to the public unless approved by the LPEA board and even then would not be available until after the directors cast their final votes on the increases.

LPEA has the legal obligation to accept member comments until 10 days prior to the effective date of its proposed changes. If LPEA is a proponent of conservation, efficiency and renewable generation, it should not approve policies that are at odds with its rhetoric. If you believe these proposed increases are taking our utility down the wrong path, either contact LPEA before or attend the Dec. 19 board meeting. It is, after all, a co-op owned by us.

– Harry Riegle, chair, Smart Energy Committee, Durango

LPEA unfair to green power users
La Plata Electric has been intimating an electrical rate hike would be forthcoming by the end of this year – and now that proposed rate hike has arrived. Fair enough – the cost of energy from conventional sources rarely decreases, and LPEA has done an acceptable job of controlling costs and keeping our rate steady over the last few years.

The stated driver of this rate increase is the “rise in the cost of wholesale power provided by Tri-State Generation.” OK, I get it – our wholesale rate goes up, then our retail rate goes up. Right? Well, not exactly. LPEA has chosen to generate an additional 3.3 percent in revenue by increasing our base rate, which is not linked to the amount of energy we consume. Would it be fair to assume that if the cost to purchase a kWhour from Tri-State increases, then the cost to purchase a kW hour from LPEA should also be adjusted – not the base rate, which to my understanding was designed to provide for LPEA’s infrastructure and operations expenditures?

Increasing our base rate to account for an increase in wholesale energy costs seems counter-intuitive to me. Energy is a commodity with market-driven price fluctuations. By increasing each co-op member’s fixed costs (the base rate), we are unfairly penalizing our fellow co-op members who have invested in renewables to provide 100 percent of their electrical needs. In addition, by not linking our wholesale and retail energy rates, we also lose an important conservation incentive.

After reading the article in the Herald, and LPEA’s press release in which they state that their rate hike is directly related to the wholesale energy cost increase from Tri-State, it remains unclear to me why LPEA has chosen to hike our base rate, not our cost of energy.

 
My hope is that in the lead-up to LPEA’s Dec. 19 board meeting, justification will be forthcoming from LPEA, and all co-op members with an opinion on the funding mechanism for this proposed rate hike will be heard.

 

Stop highway reroute boondoggle
To the Editor:
Are you aware that the Colo. Dept of Transportation is planning to spend more than $76 million to realign Hwy 550 to avoid Farmington Hill?

 

In meetings a few weeks ago, CDOT presented plans to route Hwy 550 from the top of Farmington Hill to connect with the infamous “Bridge to Nowhere.” It will cut across the historic Craig and Webb Ranches and will include yet another large bridge across Hwy 160 E, (the highway will be four lanes, “The Bridge” is only two lanes) an 880-ft wide cut (equal to three football fields) 40- to 120-ft deep through 1,400 feet of piñon, ponderosa and juniper forests and across two significant ravines. According to engineer Kathleen Krager, trucks would have to make 800,000 trips to remove the earth. How’s that for a big waste of money and unnecessary contribution to our carbon footprint?