We Can’t Continue with These Electric Rates

Seated to Rear: Wendy Buxton-Andrade, Rick Robbins, Lisa Nolder, Jim Miller

Arkansas River Power Authority directors heard from three business owner/operators and a Prowers County Commissioner on how electric rates tied to the Lamar Repowering Project will stifle business growth.  The director’s monthly meeting was held in Springfield this past Thursday, May 30.  The meetings rotate among six ARPA community members. 

Jim Miller, owner of Ports to Plains Travel Plaza, Doug Thrall of the Rodeway Cow Palace Inn, and Rick Robbins of Colorado Mills, along with commissioner Wendy Buxton-Andrade stated their beliefs that the high electric rates paid to reduce debt service on the Repowering Project bonds, will eventually drive away business or prevent future business operations from opening in Lamar and Prowers County.  Doug Morris, of the JBS Five Rivers feed lot operation west of Lamar, was not able to attend, but had voiced similar concerns to the Lamar Utilities Board and to Rick Rigel, ARPA general Manager at a meeting this past spring.   

Wendy Buxton-Andrade Addresses ARPA Board

“Is there a way we can begin negotiations with the Repowering Project bondholders to bring these rates down?” Buxton-Andrade asked the directors.  The cost of the Lamar Repowering Project, converting a natural gas plant to coal, has incurred a series of cost overruns and is currently offline.  ARPA has been supplying member communities with electricity purchased from regional sources. Customers continue to pay the debt service from the construction bonds.  From her background in business marketing, the commissioner stated she believed the electric rates are stifling business growth in the community, a view shared by Lisa Nolder, Prowers County Development Incorporated, executive director, who also attended the meeting, but did not address the board.  Buxton-Andrade said the rates are impacting every property owner in the community, not just businesses.  She asked that the three businessmen be allowed time to state their position to the directors, something they have been attempting to do for the past several months. “How can you not let them have a voice,” she asked the board in general. 

ARPA general consul, Craig Johnson, stated his reluctance to the request, explaining, “We operate differently as a board as we’re power wholesalers and not direct suppliers.  There is no invoice that comes to our customers from ARPA.”  Johnson said their best avenue was through their specific electric suppliers, but left it open to the board to hear from the three.  Houssin Hourieh, Lamar Light and Power Superintendant and attorney Garth Nieschburg, representing the City of Lamar, both stated that the businessmen have made repeated requests to explain their position and believed this would be the best opportunity to gain some insight into their concerns. 

Rick Robbins of Colorado Mills

Each of the speakers, Miller, Thrall and Robbins, shared common elements in that matter:  the high rates are hurting their separate businesses; the rates are impacting their employees and the general customers of Lamar Light and Power.  Each stated that these high rates will prohibit future business growth in the Lamar community.  Rick Robbins of Colorado Mills said each of the three businesses are investigating alternatives to ARPA while seeking ways to cut back on power usage, noting Ports to Plains was switching to LED lighting.  Robbins told the group, “We’re at the point where we are exploring our own private power supplies to lower our costs, and when that happens it will be the start of an implosion, as your rates will be on the backs of fewer customers,” he said.  Robbins added that their concerns were not just for their own costs, but for the entire community.  He added, “We can fix our own issues when we bring in our own generators, but it’s not fixing the issues of our employees.”  Robbins warned that he didn’t believe that matters will improve, stating, “We’re just entering the first couple of years of this situation.  What do you think the business community will be like in the next ten or twenty?” 

Doug Thrall (Stock Photo)

Doug Thrall of the Rodeway Cow Palace Inn said that he often pays more in electric rates than his motel’s mortgage.  “Your debt service on the Repowering Project is about 34% of your budget,” he stated.  Thrall noted his concern with the dwindling population of each of the communities served by ARPA in Prowers County.  “All of the towns are noting a population loss over the years and that means there will be fewer users with higher utility costs.”  He added, “Just raising rates is not good management.” 

Jim Miller, Owner of Ports to Plains Travel Plaza

Jim Miller, owner of the Ports to Plains Travel Plaza west of Lamar, echoed the earlier statements, adding, “This concern is not just for us but for everyone in the community.  I have a waitress who has a $400 monthly rental who last year was being charged $500 in utility fees.”  He also cautioned that something has to be done on the cost of the bonds or there will be changes on his part for electricity sources as well.  Earlier, Buxton-Andrade said an estimate of an average monthly electric fee for all three businesses, including $10,000 a month paid by the county, comes to $136,000.  She said that will make an impact on ARPA revenues if that monthly income goes away.  The March 2013 financial report for Lamar Light and Power showed gross operating revenue is $947,659.  A rough estimate shows the four businesses contribute about 7% of LL&P’s monthly income. 

No action was taken by the ARPA board following the statements.  Commissioner Joe Marble asked Rick Rigel if he would be available to provide the county commissioners with periodic updates on both the status of the Repowering Project and ARPA activities as well.  The general manager said he would make it a point to include a meeting in his schedule. 

In a follow up conversation with Doug Thrall, when asked if there was a future, ‘tipping point’ discussed among the business owners to when they would actively plan for alternative energy sources, Thrall replied, “We’re already past that point.”  He noted that natural gas generators and wind energy would be the most likely power providers.  Thrall added that the businesses would probably need to, “stay on the grid” for power whenever a generator was taken off line for repairs or maintenance.  No specific timetable was discussed for when that would happen.

By Russ Baldwin