Lamar Utilities Board Discusses Potential November Rate Increase

Repowering Project Coal Storage Domes

Editor’s Note:

Light Plant Superintendent Rick Rigel pointed out that potential rate increases at this time have not been finalized.  Mr. Rigel stated that although purchased power costs will have an impact on future rate increases, the ones given in this article are not set in stone.  Rigel added that he believed it would be unlikely that the Lamar Utilities Board will select the highest rate from the list of options presented to them.

Russ Baldwin, The Prowers Journal 

The Lamar Utility Board took no action on the most recent recommendations for an electric rate increase.  The projections, which extend to 2016, are based on rising projected power costs and expenses, as well as revenues needed to maintain net income and keep cash reserves at financial targets. 

Earlier this year the board discussed the possible need for several 2.5% annual rate increases between June 2010 and June 2013.  The newer study anticipates extending the series of increases and reviews the need for an Electric Cost Adjustment.    The board can enact an ECA for 12 months for unexpected costs that rise more than 10% from projected expenses.  Light Plant Superintendent Rick Rigel said the purchased power costs now exceed that 10% level and will stay that way through the end of the year.  In additional, ARPA base rate of power supply costs is expected to go up by 3% a year, and the ARPA ECA will stay level.  However, power costs from WAPA, Western Area Power Administration are believed to be increasing by 5% annually starting in 2013.   Rigel said the utilities board has several options of rate increases combined with an ECA which could begin this November.  The largest increase would average an additional $10 per month for residential customers.  The board will review recently received information at the next meeting, August 23. 

The Repowering Project has been fired up since December’s malfunctions.  Unit 6, according to Superintendent Rigel is operating well, however the control system on Unit 8 was giving incorrect voltage levels and fault conditions.  A check showed Unit 8 was operating correctly and staff decided to take the Unit off line to recalibrate the control system to show true performance readings.  The plant is currently using the former coal supplies placed outdoors from the storage domes until they have been eliminated and then the plant will switch to the new coal from the latest shipment.  Rigel said the plant will need to purchase additional natural gas supplies to be used to bring the plant operation online through August 15.  He added that Unit 6 is at 75% of power capacity and Unit 8 is at 60% and has been increasing its power output.  Rigel noted that the cost of coal since the Repowering project began has increased $10 per ton to $40.  Coal transport now takes 17 days from a shipment order to delivery date. 

The Utility Board discussed their options based on findings from the Colorado Department of Public Health and Environment for the financial penalties levied against the light plant due to emission exceedances when the Repowering Project was first fired.   Rigel had suggested the payment be made through installation of energy efficient municipal street lighting, but the Governor’s Energy Office submitted an alternative which the health department approved.  The light plant will undertake a resource conservation project based on energy/water assessments at Lamar Community College, Otero Junior College and/or Trinidad State Junior College.  The project will select three buildings on a campus selected by the CDPHE for energy performance enhancement and environmental benefit and present a review for consideration.  The expected cost will be $86,800, administered by the GEO.  The project should save the selected community college between $25,000 and $50,000 a year in energy costs.

By Russ Baldwin