City Council tables LP&L rebates and rate hike discussion - KCBD NewsChannel 11 Lubbock

City Council tables LP&L rebates and rate hike discussion


Lubbock City Council members, on Tuesday, opted to table a discussion to raise LP&L rates and do away with rebates. After going over the numbers and discussing their options, Council opted to continue their research before making any decisions.

"We have a duty as the rate setters to make sure that any rate increases are justified," Mayor Tom Martin said.

Mayor Martin serves on LP&L's board and says any decision to increase rates, needs to be made after careful consideration.

"So we can have the lowest electricity rates in the State of Texas, now and in the future. We have the lowest now and we need to keep it that way," Martin said.

However, Councilman Todd Klein disagrees. He says he has spoken with his constituents and they would rather see lower rates instead of rebates to ensure future rate stability.

"(An option) that's mature and a grown up approach that says, "what we're going to do is look at how we're going to stabilize rates and keep them as low as possible and give you more predictability," Klein said.

Since 1983, there have only been three requests for a rate hike. The most recent was in March 2009. LP&L says 75% of their expenses are wholesale power. LP&L purchases the power at a wholesale rate from X-CEL, and then sell that power at a retail rate to customers.

LP&L's board has already approved a recommendation to raise their rates 5% overall, but LP&L's board chairman opposes any rate hike.

Councilman Jim Gilbreath says the Council wants to go over the ordinance that created LP&L. He says there are several issues that need to be addressed before a rate hike can be approved. He says one of those, has to do with reserve levels.

"Before we address the rates Council felt like it was appropriate to review the ordinance and give it a good scrubbing before we go forward," Gilbreath said. "I think that is certainly appropriate."

City Council also tabled a discussion that would do away with rebates. Klein is a supporters of dropping rebates. He says, now that LP&L is no longer competing for Xcel, there's no reason to keep the rebates. Klein says the money would benefit customers more if it were used for other purposes.

"We need to look at the way we do rebates, we need to look at the reserve level and we need to look at a more pay as you go. Those are all going to be critical issues, not only for LP&L but the city as a whole," Klein said.

Mayor Martin says no matter what decision is reached, it needs to be thoroughly researched.

"The bottom line is this: we don't need to be taking more money from the rate payers than we need to operate the electric utility," Martin said.

CORRECTION: Councilman Klein does not support rate hikes and that was not stated clearly in our previous version.

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