Commissioners, Businesses Continue to Push for ARPA Meeting

People still want answers from Arkansas River Power Authority regarding the electric rate structure pertaining to the Lamar Repowering Project and the status and ownership of the bonds sold to finance the conversion of the Lamar natural gas facility to the coal generated plant. The plant has been offline since December before last. Construction cost overruns exceeded the initial projections by about $100 million. Customers are now paying for power purchased off a grid, but are also still paying the debt service associated with the dormant plant. Some local major power purchasers approached the Lamar Utilities Board last year with concerns about the costs they are incurring and why the rates are so high.

Jim Miller from the Ports to Plains Truck Plaza, Rick Robbins from Colorado Mills and Doug Morris from JBS Five Rivers Feedlot have met with the utilities board, seeking an understanding on the rate levels as well as a meeting with ARPA representatives on March 5 to address the same questions and the construction cost overruns. To date, they, the Prowers County Commissioners and some members of the Lamar Utility Board believe more information should be forthcoming from ARPA.

ARPA General Manager, Rick Rigel, provided written answers to some of those questions. Regarding the performance bonding company for the project, Rigel replied there was no one specific company, but several performance bonds were selected individually by the contractors and material suppliers associated with the project. Rigel replied that the Repowering Project was funded through a series of bonds which is available in the Official Statements for the bonds, but were too lengthy to outline in his written response. He recapped that ARPA members voted in favor of issuing additional bonds beyond the initial cost investment.

Bob Freidenberger, President of ARPA, sent a letter to the Prowers County Commissioners and Lisa Nolder, PCDI Executive Director on April 2 addressing in part, the electric rate structure charged by the six ARPA member municipalities (Holly, La Junta, Lamar, Las Animas, Springfield, Trinidad). Freidenberger said ARPA, “..has no ability to fix or determine the rates a member municipality charges its ratepayers. Questions regarding rates paid by customers should thus be directed to the utility boards or councils of the individual member municipalities.” For Lamar customers, the entity would be Lamar Light and Power.

The Lamar Utility Board replied to Bob Freidenberger’s letter on April 12 and carbon copied the Prowers County Commissioners among others, with their disappointment in what they termed a limited response from ARPA.

“We are disappointed in your response to the Commissioners and would like to clarify that the individual member’s rates are structured around the ARPA wholesale rate. The rate Lamar Utilities Board charges is primarily comprised of the ARPA rate and Lamar Utilities Board has no direct input on what rate ARPA sets. In indicating that any concern over the rates ought to be addressed by the local city and utility boards, your summary dismissed ARPA’s role in both setting the rates and the representative association of its members. There is no question that the local utilities are held captive to the ARPA rate.

We believe that ARPA should take a more proactive role in dealing with these types of customer concerns. We are disappointed with the ARPA decision in not allowing the Prowers County Commissioners to take 30 minutes and meet with the ARPA board, as they are elected officials who are concerned about ARPA and the local economy. We believe that postponing this type of meeting until November is not to anyone’s advantage and reflects negatively on the ARPA administration, as well as the member cities.”

The letter concludes by requesting ARPA President Freidenberger to reconsider and set a meeting to address the concerns of the Prowers County Commissioners.

By Russ Baldwin