LP&L board members say 'We are listening' - KCBD NewsChannel 11 Lubbock

LP&L board members say 'We are listening'

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LP&L Electric Utility Board Chairman Gail Kring LP&L Electric Utility Board Chairman Gail Kring
LUBBOCK, TX (KCBD) -

LP&L Electric Utility Board Chairman Gail Kring and Vice-Chairman Emilio Abeyta held a press conference Friday morning.

Mayor Glen Robertson and Councilman Victor Hernandez made statements immediately after.

Kring touched on customer service issues and reasons for the rate increase, but his overwhelming message was, "We are listening."

He said the Electric Utility Board will be considering a number of options at their next meeting, including possible changes to the way the company handles payment arrangements.

Kring said the rate increase was necessary because LP&L had gone four years without passing on the full cost of wholesale power from Xcel.

Councilman Victor Hernandez put it this way, "We need to dig ourselves out of a hole that's been created over the last four years. The rate payer will have to foot that bill."

Kring said the rate increase was prompted by concern over LP&L's deficit, and concerns about a downgrade in their bond rating - a downgrade that would have saddled the company with millions in extra interest payments.

When asked if these higher rates would make Lubbock less competitive and less attractive to business, Kring said, "If you're not that much higher than anyone else, you're still in the ball game."

Kring and the mayor both acknowledged that LP&L needs to do a better job of communicating with the public.

Kring promised to do a better job explaining how the under-billed revenue from June would be collected, and to make the fuel cost pass through details a matter of public record.

He said they were still investigating the circumstances that led to the billing glitch and promised, "We are going to see to it that it won't happen again."

Kring said, "Someone will be held accountable" as soon as the investigation is complete.

When asked how management could allow the company to build up a multi-million dollar deficit, Kring said, "I don't think it was anyone's fault management-wise because we could not get the rate increases."

Kring said the board will be looking at things like the LP&L advertising budget, but said they might use advertising "to inform the public how to do conservation."

Then Lubbock Mayor Glen Robertson stepped up to the podium and promised that the city council would address these issues on Tuesday night.

All of the speakers acknowledged the difficulties that these bills are creating for Lubbock citizens and expressed their willingness to work together and find a solution to these problems.

The mayor said, "We had to have a rate increase, I still disagree with the timing. We were going to be fine waiting until October."

He said the board and the city council have to "Admit we've made mistakes and figure out a way to go forward. We've got to figure out a way to do a better job of day to day business, a better job of communicating."

Robertson said people are focused on the rate increase, but the real problem is the fuel cost.

He said the billing errors and the timing of the rate increase, combined with the decision to suddenly pass on 100% of the fuel cost during one of the hottest months of the year - all of these things combined to create a "perfect storm" of bad news for LP&L customers.

He criticized LP&L for "under collecting the fuel cost for years," then deciding to "recoup all of it with a rate increase at the worst possible time."

Robertson promised "more transparency" from the council, starting with the meeting next Tuesday.

The mayor acknowledged problems created by the management structure of LP&L, asking "Is it a business or is it a division of the city of Lubbock?"

He said, "We need to provide with ample reserves but not with a for-profit motive," and promised to consider "all options" in the Tuesday meeting.

"I don't know if we'll be able to get any relief for the citizens or not, but we have to ask," Robertson said. "We've got to be financially responsible, but we can't do anything knee-jerk that will affect our bond rating."

Councilman Victor Hernandez took the podium after Mayor Robertson, offering a four-page document full of specific suggestions for the board.

Hernandez said he wants to address LP&L's deficit by reducing the costs that the company has to pay, specifically by reducing the costs that the company has to pay to the city's general fund.

Hernandez outlined his proposal in a in a statement issued on Friday afternoon:

"Two costs, within the City Council's control, are franchise fees and the costs associated with street lighting charged to LP&L.

"In order to achieve a lower electric rate, I will be proposing that the franchise fees paid by LP&L to the City of Lubbock be suspended for a period of at least two months.

"Additionally, and again, in order to achieve a lower electric rate, I will be proposing that the costs associated with street lights be shifted back to the general fund for a period of at least two months.

"In order to offset the loss to the general fund associated with these proposals, I am putting before Council a budget amendment which will absorb these costs through the use of additional sales tax revenues collected up to now and through the end of the current fiscal year (amounts over what was originally projected)."

Hernandez said there has been, "a lot of political posturing with LP&L."

All three speakers said politics was part of the problem.

Gail Kring said "It's hard to be business people when things get political."

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