Light Plant Customer Protests Rate Classification, Rick Beard Joins Utility Board

Rick Beard Taking Oath as Lamar Utility Board member

Pastor Mark Viar of the Redeeming Love Church south of Lamar, spoke to the Lamar Utilities Board Tuesday, with concerns about the higher customer rating and consequent higher billing rates the church encountered due to summer air conditioner usage. 

The church is paying a demand charge, he said, higher than their monthly electric payments because the use of five, roof-mounted air conditioners in the summer put the church at or slightly above the 40 KW metered draw threshold which induced the extra billing charges.  Viar said, “We received a bill of $190 for electric use, but also was billed $540 for demand charges for two straight months!”  The pastor was critical of the fact that the demand level was only a hairline above the 40KW threshold for three months in the summer, but registered half that for the other months, and was still listed as a demand customer and charged accordingly, now for each month of the year.  He added, “Sunday morning is not a peak use period in Lamar as most of our retail and manufacturing businesses are closed.”  He said it’s been the practice for the church to start running the air conditioners early in the morning, so the building will be cool in time for Sunday services.  Viar said the demand charge decreased with the drop in air conditioner use to about 20KW, but they were still being listed with a demand charge of about $200 per month since the fall.  He said he didn’t feel it was fair to still be charged with the demand rates when the demand wasn’t there. 

A recent audit by Lamar Light and Power noted the extra summer demand which prompted the customer classification change to GSL (large) from GSS.  Light Plant Superintendent Houssin Hourieh said the rates are derived from an assessment conducted by NMPP, Nebraska Municipal Power Pool, which advises subscriber power companies on their rate structures.  “If we alter your classification or write off these charges, then our customers in your bracket or those who are a little higher will also want reductions because they are just marginally higher,” he explained that the power company could not afford to do that.  He added, “We also have to look at the infrastructure costs that go with higher classifications, providing the hardware necessary to deliver the current.”  Viar noted that he contacted the power facility in La Junta and was told that they use a 45KW threshold and not 40 as in Lamar.  Viar, when asked, said the church had not taken any preventative steps to see if they could reduce their power usage in the summer, but would give that consideration.  He echoed the thoughts of several other peak power customers when he said that at the extra price the church is paying on the demand rate, they could purchase a generator and pay it off in several years.   Hourieh said there are other customers in similar circumstances such as feedlots and irrigators who have peak usage periods coupled with lesser power draws for the remainder of the year. 

Mayor Roger Stagner noted that the light plant is not doing as well as it could in light of the current year to date financial statement that shows the plant is down $308,000 compared to last year’s revenues.  Board Chairman, David Anderson, said he’d recommend reviewing the current fee policies, but added that the plant is not trying to make as much money as it could through its fee structure and member Mike Bryant said he too, would recommend talking with the plant’s advisors to determine how fair the demand charge fees were levied. 

In other action, new board member, Rick Beard was sworn in, replacing Ron Cook who joined the Lamar City Council.  The reorganization of the board will remain the same with David Anderson as Chairman, Mike Bryant as Vice-chair, John Lefferdink as board attorney and Houssin Hourieh as Light Plant Superintendent. 

The August 2013 financial statement shows total operating revenue for the year at $8,749,883 and total operating costs at $7,751,389 for a gross of $998,493.  When the non-operating revenues and expenses are considered, there is a net loss of $308,128, year to date.  Year to date retail electric sales are down 12% or approximately $1,249,248.  Irrigation sales are off by 66% and commercial sales are down 3.9%.  Residential sales are up 11.5% from last year.

By Russ Baldwin