Lubbock Mayor Glen Robertson had some strong words for LP&L this week.
First he made an appearance on the "I hate LP&L" Facebook page, saying that the city council had been 'misled' by LP&L staff.
Then he appeared on KCBD NewsChannel 11 at 6, questioning the timing of, and the justification for, the recent rate increase.
"It was ludicrous for that board and this council to institute this increase when they did, especially when - you've got to remember we paid rate consultants over one quarter of a million dollars to make recommendations. Their recommendation was to make the rate increase effective Oct. 1," Robertson said.
Robertson says, "This is the first increase of a proposed four-step increase. Nobody's talking about that. This is going to get worse, unless we band together."
LP&L justified the rate increase by pointing to their deficit, but Robertson says the utility created their deficit by strategically paying down debt.
"We need to understand that they're not in the big financial hole that they painted for their board and for this council. 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," Robertson said.
Robertson says most of the company's deficit was caused by a cost overrun in one project.
"If you cut through everything," Robertson said, "they lost $3.2 million. Over $3 million of that was cost overrun in one project alone. You're down to less than $300,000 in loss. 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 hadn't filled it yet. They spent $68,000 on a personal assistant to the CEO."
But LP&L Representative Matt Rose says that deficit was caused by the cost of purchasing power from Xcel.
Rose said, "At the end of last year we had a $3.2 million shortfall. That was directly linked to our cost of purchasing our wholesale power. The $3 million short of expenses last year and the projected $17.7 million this year are strictly related to our cost of purchasing wholesale power from Xcel."
Rose said Xcel has been raising their rates for years, but LP&L has just recently started passing those costs on to customers.
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