Major Power Purchaser Voices Electric Rate Concern to LUB

Lamar Light and Power Plant

“My electric bill last month was $15,000 and I and several other local business owners are considering our options on future power purchases from the light plant,” stated Jim Miller, President and sole proprietor of the Ports to Plains Travel Plaza located west of Lamar off Highway 50.  Miller voiced those concerns during the Lamar Utility Board’s regular meeting Tuesday, September 25.  He said the cost of electricity has increased 25% since he purchased the Plaza in 2008 with little change in use.  “We’ve probably cut back somewhat on our overall usage,” he stated.

Miller said he’s spoken with his 60 employees at the Travel Plaza and they, too, have seen their monthly bills increase.  “I’ve got a waitress who paid a $500 monthly utility bill.  “One of my employees has seen as much as a 300% increase on their most recent bills,” he explained.

Miller told the board he and several other business owners in the Valley are exploring their options for their future power needs.  “I’ve been researching this for quite some time, and I’m looking at putting in my own alternative…wind turbines.   I’ve got a proposal and the way it’s going to work is the payment I would make for that system is a four year commitment, and it’s less than my four year utility bill right now, and it will take care of all of our needs,” he said.

Miller asked the board what will happen to the other residents who use the light plant for power if he and several other major power purchasers drop off the grid.  “You’re looking at the loss of around $150,000 to $200,000 in monthly revenue if every one of us supplies our own power,” Miller explained.  He said it will unfortunately develop into a domino effect and will put a lot of strain on the residents of this community.  Miller added that he is aware the board is mindful of the difficulty of attracting new businesses to the area, especially if their future operation will require substantial power purchases.  “I don’t want to see this area die, and I don’t even like to use that word in this reference, but the situation cannot continue this way,” he said, asking the board, “I just don’t see the light at the end of the tunnel, do you?”  Miller added that he wasn’t addressing the board for any special consideration, but only for updated information on the status of the plant and its future as a power supplier.  Miller said he’s respecting the privacy of the other businesses he’s spoken with, but he will meet this week with an Idaho based wind turbine developer to gather additional information before he decides his steps regarding a power source for Ports to Plains Travel Plaza.

Board President Don Steerman gave Miller an overview of the power problems associated with the Repowering Project, as well as the on-going lawsuits with WildEarth Guardians environmental group.  He explained the decisions to convert from gas to coal were made with the best technical and financial advice possible at the time, but shifting power costs and supplies have not worked to the benefit of the Light Plant or its customers.  Steerman said the board has only a few options available regarding rate adjustments and any action of consequence would have to come from the parent company, ARPA, Arkansas River Power Authority.  Steerman said that bankruptcy has been discussed which would lead to a default on approximately $166 M in bonds to the holders, but did not elaborate beyond that point.  Raton, New Mexico, a former ARPA member, opted out of the municipal group several years ago, and the City of Trinidad has recently discussed their options for continued membership.

Lamar Mayor Roger Stagner added that the Light Plant is having a rate review performed by Nebraska Municipal Power Pool regarding customer rate classification to see if the classifications are self sustaining, but he added that, “we’re between a rock and a hard place.”   Board member Ron Cook reaffirmed his earlier statement this past summer that the board needs to take some form of action to move ahead on the rates and Repowering Project.  Cook commented, “We’ve got to step up to the plate.  This is one more person coming in here talking to us and we have nothing to tell him.”  He suggested the board meet with the city council to discuss options regarding ARPA, “and get them involved in these negotiations.”  Cook said the board has to do more than just approve purchase orders each month.  “I had two calls from Lamar residents who are facing utility disconnects tomorrow because they can’t afford to make a payment.”

Managers from Five Rivers, JBS Feedlots at the Wiley Junction met last year with utility board members regarding their company’s electric rates, asking if board members could offer some economic relief on their rates.  The JBS representatives stated that the cattle feeding operation was paying the highest rates out of several dozen similar sized companies they owned in the mid-west.

In other action, the board approved a 2000 ft line extension for John Sutphin which will cost the basic minimum of $278.51 a month on a five year contract.  A $2,850 bid was approved for Western United Company for meter socket seal equipment, and $13,000 was noted and will be approved during the next board meeting to cover the cost of replacing equipment at a substation south of Lamar.

By Russ Baldwin


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