Public outrage over high utility bills boiled over this week, as the LP&L rate increase kicked in during one of the hottest months of the year.
Wednesday evening, an angry customer created a Facebook page entitled "I Hate LP&L." It received over 2500 likes overnight. Citizens have scheduled a protest in front of the LP&L building for Monday morning, July 22 at 7:30 a.m.
Lubbock Mayor Glen Robertson feels the city council and Lubbock residents were deceived by LP&L.
"What was sold to the board, what was sold to the city council as a 9.7% increase...they are seeing anywhere from a 40 to 100% increase in their electric bill," Robertson said.
LP&L originally petitioned for the rate increase because they were in a deficit. They told the city council they had a $3.2 million shortfall due to the cost of purchasing fuel. LP&L spokesman Matt Rose said they were headed for a large deficit because they hadn't raised their rates in the last four years.
"Over four years, our revenues remained the same while our cost of purchasing power had gone up," Rose said.
Rose said rate consultants told them if they didn't make increases LP&L would be in a $17.7 million deficit. But Mayor Robertson disputes LP&L's numbers.
"We need to understand that they're not in the big financial hole that they painted for their board and for this council," Robertson said. "They lost $3.2 million last year. Now they showed about a $12 million decrease in the reserves. They did that intentionally, they paid down, they decreased their debt intentionally to spend down those reserves, in my opinion, to justify a rate increase."
The mayor said he thinks they are trying to cover up for financial mismanagement.
"They've got a $600,000 advertising budget. They've got no competitors, they don't need an advertising budget. They just added a key employee. They created another position for a CFO that they hadn't had before. They spent $68,000 on a personal assistant to the CEO."
But Rose says the mayor's accusations aren't true.
"At the end of last year, we had a $3.2 million shortfall and that was directly linked to our cost of purchasing our wholesale power," he said.
Rose said that amount and the "projected $17.7 this year are strictly related to our cost of purchasing wholesale power from Xcel."
Rose says there are practical explanations your bill could be higher this month:
Rose said prices increased because the price of fuel increased. He said 78% of the bill covers Xcel fuel costs.
But just as the rate increase was set to kick in, there was a glitch in the LP&L computer system, causing many customers to be under-billed for the month of June.
The glitch caused the rates for about half of their customers to remain the same, when they should have reflected the new rate increase.
Rose said around 44,000 customers should have seen the effects of the 10% increase in June, but didn't. He said these customers were actually billed the same or less than the May amount. Rose told us once they solved the problem, customers received an accurate bill for July.
"They saw where they were in May, and then in June - when they should have seen that natural increase - they saw either an equal bill or a lesser bill. And then they see where they were in July, which is accurate, and they see a very high jump," Rose said.
This difference didn't help the consumer perception of the rate increase. This, along with other factors, made the jump seem even more dramatic.
The Electric Utility Board is considering what action would be most fair to those consumers who were under-billed in June.
Rose said LP&L would seek to find the "most reasonable and responsible path forward" for customers affected by the glitch.
But Mayor Robertson wants immediate action.
"If the LP&L board does not call a special meeting to deal with this issue, I am going to call a special council meeting to consider repealing the rate increase for 60 days to enable us to find out what went wrong," Robertson said.
The mayor says, "I have notified LPL staff and one board member that if by Monday there has been no action taken by the board to recommend a solution to the City Council to our billing issues, I will call for a special called meeting of the City Council to consider a repeal of the recent rate increase until October 1st. If this board will not take action, I will."
Councilman Todd Klein made this statement on Thursday night, "I am very concerned, along with the many others I've heard from about the LP&L billing. And, I want to reassure you that I share your concerns and will be asking for a full explanation as to the recent billing. I will also be asking for a presentation of all the options that are available to best address this issue."
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