The Durel administration decided today to pull an LUS rate increase from the agenda on Tuesday, Sept. 29 and to reintroduce the topic as a briefing item in a few weeks. Consequently, when the Lafayette Consolidated Council finalizes City-Parish President Joey Durel’s proposed budget on Sept. 29 — an almost $600 million budget — LUS’ budget within the budget will be more than a million dollars in the red. Sensing they don’t have the votes for it right now, the administration will wait a few weeks before bringing the matter back before the LCC, hoping in the meantime to build public support and to build a case council members will accept by showing them LUS services that will need to be cut in each district if the public utility isn’t given the green light to adjust rates.
“We have to pursue a rate increase,” Durel insists. LUS is seeking a rate increase to cover $150 million in upgrades to infrastructure. According to LUS Director Terry Huval, currently low fuel costs mean that even with an approved rate hike, the average utility bill in Lafayette will fall in 2010 and rise no more than $14 per month, per household, in 2011, although the utility expects that the average rate increase could be as little as .50 cents more per household per month in 2011. “This not $150 million dollars worth of work you do just because you think it’s a neat thing to do, Durel says. “We have to do it.”
“In this position, we sometimes have to make hard decisions,” says District 7 Councilman Don Bertrand, who supports the rate increase. “Noboby wants to raise rates, but we sit on top of a multi-million dollar corporation, not a student government, and sometimes hard choices have to be made.”
The rate hike was met with resistance when it was introduced before the council last week. Three council members voted against it, another indicated he would vote against it if it made it to final adoption, and a fourth was on the fence, saying only that he planned to talk to constituents before making up his mind. Bertrand admits, a utility rate hike is a politically sensitive issue. “Nobody wins by increasing rates,” he admits. “I don’t win politically. It’s not something we want to do, but we know it’s something at some point in time we’re going to have to do. Now’s the time to do it, when we can take advantage of low energy costs. A few years from now when natural gas is back up, and oil prices are back up, is that the time? Does it get any easier then? I don’t think it gets any easier, it’s just going to get harder.”
Durel, meanwhile, sounds confident that, given time, he can sell the council on the increase. “The council will eventually come around,” he predicts. “It’s a question of will they do it when it’s an emergency? Or will they do it to prevent an emergency?”
... written by The Oracle of Gueydan , September 21, 2009 - 06:18 pm
(rate hike) and the Fiber program has nothing to do with it--right.
... written by ragin_cajun , September 21, 2009 - 06:44 pm
That's right, Mr. Bertrand. "sometimes hard choices have to be made". Why don't you and the rest of the council start making those hard choices, then? CUT SPENDING!!!!!! That never seems to be an option.
... written by John St. Julien , September 21, 2009 - 07:38 pm
The rate hike has nothing to do with the fiber project. That's not just my opinion—that's the judgment of anyone who is informed and understands the situation. Cox and AT&T have set things up in a state law AT&T (then BellSouth) wrote and both had passed that LUS could NOT "cross-subsidize." If you think LUS would risk more lawsuits at this point you're just not thinking.
(And, of course, the law doesn't apply to either AT&T or BellSouth who routinely use cross-subsidization to gain market share.)
... written by Jason D. Faulk , September 21, 2009 - 08:01 pm
Hopefully what we shall also see during this process is an increased push towards household and business energy efficiency programs. In the long term, those efforts will pay more dividends for our community. Decreased electrical expenditures, with increased expenditures in the short term for weatherization, solar panels, solar water heating, etc., will stimulate local business, as opposed to spending the same funds on the electricity itself, which then would only serve to put funds in the pockets of the coal mining companies in Wyoming.
Does anyone know if LUS is required to develop an RPS (Renewable Portfolio Standard)? Offshore wind potential, solar, and geothermal are good options here.
... written by Phil Lank , September 21, 2009 - 08:25 pm
I guess some will call this a rate hike, but, more importantly, it requisite LUS spending on infrastucture improvements to protect our huge LUS capital investment. And there is no better time for expenditure of public dollars on infrastructure than in a soft economy. It will stimulate our economy and create job growth, and the cost of improvements will be less than it would be in a more robust economy. We will get more bang for our buck. The job growth consequence should be special importantance to those councilmen whose districts have higher rates of unemployment. That some are using the soft economy argument as justification for not supporting the LUS initiative is just plain dumb...false logic.
... written by The Oracle of Gueydan , September 21, 2009 - 08:55 pm
Jason D. Faulk writes "Does anyone know if LUS is required to develop....Offshore wind potential"
Why go offshore? Just put a windmill next to City Hall.
... written by northsidian , September 21, 2009 - 09:29 pm
ATT is a stockholder owned company and Cox is a private owned company. They do not, let me repeat, DO NOT use taxpayer dollars to exist. And Phil, if it walks like a duck (rate increase) and talks like a duck (rate increase) it is a duck (rate increase).
... written by voodoo science , September 21, 2009 - 10:10 pm
Why not let Terry Huval startt he savings by retracting the very, very significant raises the white collar electrical engineers were just given? Additionally, if they had devoted their energies to Smart Grid technologies, instead of obsessing about fiber, their would be less need for it now. Remember the fiber ring to make a million and connect to the old Superstore hub. Wake up people, you're getting hosed again.
... written by Terry Huval , September 22, 2009 - 01:32 am
LUS is owned by, and held accountable to, the citizens of Lafayette.
This rate adjustment is necessary for LUS to continue to provide the quality of services our residents and businesses say they want. The costs of operations, maintenance and capital construction have gone up considerably. For example, the cost for transformers and wire has doubled in the last 5 years, due to increased demand for steel, copper and aluminum. The electric transmission grid in the Acadiana is in need of a major upgrade. Entergy, Cleco and Lafayette will be participating in the $215 million cost of these upgrades - Lafayette's share is $23 million.
Unlike a business which has a reduction of customers in an economic slowdown, LUS's customer base continues to grow. Our successes in maintaining the best service reliability in the state and our quick response to hurricane damage, is due in large part to our aggressive pole maintenance and tree trimming programs. We can reduce those maintenance and tree trimming costs significantly, but to do so will result in more frequent and more lengthy power outages.
With current fuel prices at low levels, there will be little - if any -financial impact on customers who purchase LUS electric, water and wastewater services. Understandably, fuel prices may go up in the future, but when would be the best time to adjust rates? In a period of low fuel costs or high fuel costs?
Water and sewer infrastructure must also be constructed to meet the needs of our growing community. These proposed rate adjustments include projects for these utilities also.
Despite sound bites to the contrary, these rate adjustments have nothing to do with LUS Fiber. Even without LUS Fiber, these same rate adjustments would have been proposed at this time.
In reference to the comment about Green Power, LUS is not required to develop Green Power. However, LUS believes a "Smart Grid" would be a cost effective means to help customers better manage their utility bill. If the Lafayette Public Utilities Authority and the Council so approve, LUS will provide such a system.
Please let me know if you have any further questions or comments.
I can be reached at 337 291 5804 and
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Terry
... written by xxx , September 22, 2009 - 04:17 am
If the administration would not have given the political appointees in a civil service organization such tremendous raises last year (politics as usual, by the way), then LCG would not be in such a predicament this year.
... written by JP , September 22, 2009 - 03:23 pm
I hope LUS pursues both Smart Grid technology (allowing us to monitor utility consumption in real time) and Green Power in the near future. I and many others would be willing to pay slightly more for an alternative energy option such as biomass, etc. as Entergy currently offers. Ideally, cost would go down as more people sign on.
... written by Myrick6 , September 22, 2009 - 05:27 pm
I'd give my right arm to be able to select LUS for all my services. Even with the increase, I'd be getting a rate DEcrease. I'm outside the city limits, but I use LUS water and pay more than city residents. I think an average water bill is $38 - $42 per month for a family of 4 and we try to keep usage down as much as possible. On top of that I pay $32/mo sewerage. Then I pay, I think its $16/mo but it might be more, for ONCE a week collection of garbage. Entex usually runs $35/mo, but in the winter its in the $hundreds. And fially, SLEMCO runs $270 - $320 in the hot months and lowers to $175 when its really cold. And we burn our fireplace, so a cord of wood is another couple of hundred. Not to mention I don't have much choice for cable and computer: $136/mo. Add that up and compare. I find most of my friends who live in the city are doing WAY better than I am when it comes to utilities. If I could have one wish, it would be that we all could choose our utilities as we do our phone companies!!! I think competition would lower rates. I sure hope my water charges don't go up. I sure wish I could dig a well in my backyard!
... written by Affordable Opinion , September 22, 2009 - 06:46 pm
"I hope LUS pursues both Smart Grid technology (allowing us to monitor utility consumption in real time) and Green Power....I and many others would be willing to pay slightly more..."
Hmm, so how much is slightly? Hold it, I feel a biomass coming on.
... written by Plumpy , September 22, 2009 - 07:38 pm
i been reading comments and i've noticed alot of smart grid crap...i'm wondering if all these commentators have a personal interest in GE's smart grid crap...
... written by JP , September 22, 2009 - 09:14 pm
"Affordable Opinion", in response to your cynicism I looked up the Geaux Green program at Entergy. For $2.25 a month you can buy 100 kWh, and each 100 kWh extra is $2.25 up to 400 kWh at a cost of $9 per month. I'll bet LUS could do that for the same or less. I don't know what my last usage was (I do conserve energy) but the average U.S. household uses about 750 kWh per month. So yeah, I'd pay an extra $7 per month for half of my energy to come from renewable sources. I like the thought of progressing our energy paradigm toward sustainability and clean power.
... written by Terry Huval , September 23, 2009 - 02:31 am
Concerning "Green Power"...If enough citizens tell their council members that they would be willing to pay more for renewable power, the council may be willing to allow LUS to fund such initiatives. In the meantime, LUS does provide a means for residents and businesses which generate their own power to sell any excess power to LUS. LUS does this through a "Net Metering" arrangement which has already been approved by the Lafayette Public Utilities Authority and the Council.
In response to comments by "voodoo science": The initial fiber ring has had revenues of over $2 million a year for the past 3 years and the plan never included anything about the Old Superstore. The LUS Fiber program is being paid for through a new revenue source (selling video, Internet and phone services), whereas "Smart Grid" would not create a new revenue source - it would be a new system that would allow customers to better monitor and control their energy costs. The pay adjustments made in the last several years brought all LCG employees closer, but still below, competitive pay levels.
... written by Jason D. Faulk , September 23, 2009 - 05:48 am
Sounds like it is time for a renewable energy symposium in this area.
Solar panels are now averaging 21% efficiency. These panels are now eligible for a total of an 80% refundable tax-credit here in the State of Louisiana up to a total system value of $25,000.00. Yes, this means in excess of any income tax liabilities you owe, the excess credit will be refunded to you via the 50% La. credit and the 30% federal credit. Very few people have chosen to take advantage of this offering as many are still unaware of it. The credit can as best I understand, be claimed for additional system expansion in subsequent years, at the site of your dwelling. Louisiana happens to be one of the leaders of incentivizing this category of renewable systems.
LUS via the LPUA has effected the net-metering rule, so any home user of a solar photovoltaic electric can sell their excess power during the day back to the grid rather than invest in batteries, though some feel the price not to be in their best interest and instead go with the battery equipment to provide flows into the evening.
Several Vermilion Parish communities are exploring the option to use wind power in Vermilion Bay for their baseload with a natural gas turbine generator for backup purposes. http://www.abbevillenow.com/content/wind-energy-source
Also see pvwatts.org for multiple links to resource info on renewable power options.
Also to Myrick6, Slemco as I understand has the lowest total rate cost per KWh in this area due to their 100% use of Coal for generating electricity. We all know coal is more damaging to our ecosystems and climate than is oil or natural gas. Though you may not have choice of electric provider at this point, if incorporation was an option, you would be able to get better water rates.
In a nutshell, if you go solar, you're locking in your rates for approximately 20 years. No complaining there about the free market not being free. Utilities are utilities, not the bazaar. You want to set your own price, buy your own system, take the government tax credits and install it. (Incidentally, the heat gain on your roof will probably go down some with all the panels absorbing the rays.)
Finally, in response to some other comments on here, private utilities do receive government assistance in various forms, through varying tax incentives in the states, through infrastructure improvements, and by the allowances of some plants to get away with pumping away our common asset of the ground water and discharge it into rivers, bayous, coulees, not meant by nature to handle heated water. These same plants require the use of strip mined coal from Wyoming, mountain top removal in West Virginia, etc. These activities all exert pressures upon ecosystems. These pressures produce effects known as externalized costs, which are not reflected in the price of your electricity. Whenever an externalized costs is not born by those producing the cost, if they are ever "fixed" later, it is through funding from the Public, I.E. the government, which is therefore, all of us. If you think of hazardous waste toxic clean up site, such as Superfund, of which there is no shortage here in Louisiana, you have someone else's externalized cost, for their individual profit.
If these costs were incorporated to reflect the TRUE cost to our system of natural capital, everyone's prices would be greater in the short term. Until now, our ecological systems have been able to absorb the dumping we do to them. Increasingly, they are not.
... written by JP , September 23, 2009 - 03:40 pm
Excellent post, Jason. Fossil fuels do have many externalized costs that are not reflected in the price at the meter or the pump. One more reason to progress toward renewable energy.
I've got a question you can probably answer. If I install a solar panel system, paying $25,000 up front and getting $20,000 back from federal and state incentives, where does that leave me with the underlying roof? Do the solar panels replace that part of the roof or does the whole shingle or metal system remain?
... written by Jason D. Faulk , September 23, 2009 - 07:21 pm
My expertise has not gone that far JP. But, from what I have seen, such systems leave the underlying roof intact for the normal weather related functions of a roof.
There have been a couple homes equipped with Solar PV around the area. The Louisiana Solar Energy Society sponsored a Spring 2009 tour, where persons across the state agreed to open their homes to show their systems to folk interested in installing a similar system. One may wish to contact the Lafayette residents on this list to ask first hand about their system. http://www.lses.org/Homes on spring 2009 tour.html
Also any one of the several local companies doing this work could provide more info.
Here is a link with a variety of info sources, as to tax credits and federal and state low interest financing for the homeowner. Take note of the fact that these systems will not increase your property tax bill. http://energy.catdancingproductions.com/financing.htm
Some of the info on the above site may be out of date, as the State Legislature expanded the 50% state credit to those who install a system on a residence, but don't necessarily occupy the residence as their homestead, or even I believe, own the residence. The intended change was meant to facilitate additional installations beyond just the owner-occupier single family home configuration.
... written by Affordable Opinion , September 24, 2009 - 06:27 pm
written by Jason D. Faulk , Sounds like it is time for a renewable energy symposium in this area. These panels are now eligible for a total of an 80% refundable tax-credit here in the State of Louisiana up to a total system value of $25,000.00. ------------
Yes, it is time for a symposium. For 2008, the Louisiana credit is 50% not 80% limited to $12,500 per system. Assuming a net cost of $12,500 and all the power you need is 3KW (most 3KW units cost $25K) it would take a number of years to break even. This does not include any maintenance cost. Economically, even with the credit, it does not work but you do get bragging rights.
... written by Affordable Opinion , September 24, 2009 - 06:34 pm
written by JP "Affordable Opinion", in response to your cynicism I looked up the Geaux Green program at Entergy. For $2.25 a month you can buy 100 kWh, and each 100 kWh extra is $2.25 up to 400 kWh at a cost of $9 per month. -----------------------
True, Entergy does have a program but it is not clear (from the website). All you do is pay Entergy extra to finance a Green program. How the economics of it works is another question.
... written by Affordable Opinion , September 24, 2009 - 08:20 pm
written by JP , Fossil fuels do have many externalized costs that are not reflected in the price at the meter or the pump. One more reason to progress toward renewable energy. -----------------
Renewable has externalized costs too--Solar panels don't grow on trees--at least not with current technology:-)
... written by Jason D. Faulk , September 24, 2009 - 11:49 pm
Affordable Opinion, it sounds like you agree on the need for renewable energy but are doubtful about the cradle-to-cradle lifetime emissions costs of Solar Photovoltaic energy systems versus burning fossil fuels.
As to the tax credit discussion, for the benefit of the Ind editors not having to read another one of my tome-like blog posts, I was hoping to avoid a lengthy breakdown of all the credit incentives. I simply highlighted in short that the TOTAL credit is available to residents of La. is 80%. My attempt at brevity looks to have caused some confusion. I presumed the enterprising readers of this board would fully investigate for themselves and consider calling a local solar consulting and installation contractor who would be better versed than I to speak on these matters, as would a real-estate agent to discuss financing options to a home buyer.
To be specific and respond to your statements, here is more information to clarify these matters:
State of Louisiana offers a 50% refundable tax credit on total system and installation costs of up to $25,000.00
This means if you purchase equipment and services, a 50% tax credit is available for costs up to $25,000.00, therefore, a maximum credit of $12,500.00 is available.
Furthermore, the federal government offers a 30% tax credit on system and installation costs. This credit DOES NOT have a maximum allowance, however your statement has led me to clarify my research on this point. I have further found that the FEDERAL CREDIT ALONE is not refundable in a single year, but can be used to defer federal tax liabilities in future years.
So assuming that a Louisiana resident installs a solar PV system on their dwelling, costing right around $25,000.00, this person would be then receive a $12,500.00 reimbursement from the State of Louisiana upon filing that year's state income tax return. Then, upon filing one's federal tax return, the same person would be eligible for a $7,500.00 credit from the Federal Treasury. If this is in excess of the filer's federal tax liabilities for that given year, the excess amount would be carried forward to the subsequent year(s) and be refunded to them against their federal tax liabilities then.
Sadly, this would not benefit the non-federal tax paying segment of our society who don't earn enough to own any federal tax, which I think is unfortunate as incentivization should benefit all segments of society. But, we should start somewhere, and if government is willing to forgo a little in the way of tax receipts to allow middle and upper income persons to install solar on their homes, then I won't begrudge anyone that incentive to become owner/operators of their own personal power plant, while remaining grid-tied.
I am open to research that would show that the production of Solar Panels produces emissions at a greater level than the equivalent lifetime total emissions of mining coal, transporting the coal by railroad cross-country daily, burning the coal, storing the waste ash from the coal and the risks to watershed pollution, and the emissions resulting from the building of coal-fired power plants (heavily concrete and steel based) and the effective power loss resulting from the long distance transportation of the electricity itself.
Maintenance on these solar systems is an understood given factor, as it is with the entire concept of home ownership and maintenance. I would appreciate your findings if you could call a local installer and ask them what issues arise with these systems and the amount of work it takes to engage in any preventative action to keep the home solar plant operating efficiently.
As for Entergy's "Geaux Green" project, I feel it is better to compost bio-mass wastes rather than burning them, as composting does not result in CO2 release last I read. While bio-mass is a "renewable resource" in a pure sense, the agricultural, transportation and processing inputs that lead to the production of most bio-mass is ultimately underwritten by the use of fossil fuels at every stage of production. So the "loop" is not closed as one would think it to be. In this instance, Entergy is contracted with companies southwest La. burning rice hulls and sugar cane products. Yes, burning is better than letting it sit around and rot, producing methane, but the best solution is to compost these wastes and restore this material back into the soils.
In short, the net cost of one of the systems you have referenced is $5,000.00, which can be funded through special loan programs, and is generally repaid in several years. Your property assessment will exempt the system from your total property value, while you maintain the added value of being able to sell a value-added home should you so choose to sell your home, knowing that this home generates its own electricity. I don't know about everyone else, but at the end of the month, my approximate cost of electricity from LUS per kilowatt hour is approximately 8-10 cents each. This is not greatly dissimilar from what I have read about Entergy and Cleco, though Slemco with family I have seen, has a lesser total cost per KW/hour.
According to one estimation I read, the savings per year for a 3 kW system are about $400-600 when the price is 9 cents per kilowatt hour. http://www.statesadvancingsolar.org/solar-101/solar-economics
If none of this is sufficient for your needs, there are also companies that will install solar on your roof, signing a long-term lease with you to buy the electricity at a fixed price for 10-20 years and beyond.
Here is the "bible" of state specific incentive, credit and loan programs for your reading: http://www.dsireusa.org/incentives/index.cfm?re=1&ee=1&spv=0&st=0&srp=1&state=LA
Also, I found this website to be useful http://www.findsolar.com/index.php?page=rightforme
Don't forget that you can claim the State of La credit for each additional system expansion you install. The best approach is to just barely max out the credit, and then wait a few years, and add on to the system and claim the credit again.
It has a drop down list for every utility in the state, enabling you to compare your total electrical load per month, how much solar PV you would need in 1/4th increments, and what the Return on Investment is over the long haul. This is calculated upon not paying what you would have paid over 25 years, presuming electrical rates stay FLAT. As recent evidence has shown rates will go up because the community is growing and needs to rebuild existing infrastructure and expand to accomodate new people (none of which takes into account the cost of burying power lines in this area for hurricane hardening, and for matters of aesthetic quality.)
I'll also say this: to the extent that LUS prospers as a utility company, profiting from servicing us, their customers, and can continue transferring ILOT (In Lieu of Tax) which private IOI's (Investor Owned Utilities) would normally pay, to the LCG budget, I believe is a good thing for the community. I would prefer to see a more progressive funding mechanism for government than this "defacto" utility taxation. When the utility is a public utility, we know certainly that this is causing the rate of electricity to be higher than it would otherwise be. (When it is private, we have to wonder to what extent this is a tax on the business profit vs. simple rate increases. No serious economist would say it is a pure 1:1 relationship, though it is certainly a factor.) Ultimately, I believe this to be regressive taxation system as the poor tend to use as much electricity if not more, as every one else does. (I am not arguing for a decreased price per kilowatt hour, simply that the tax built into to the cost per kwH is a regressive method to fund gov't as it is in effect more of a FEE than a TAX.) For that matter, business is also shouldering this inequitable tax rate, whether it is local home grown business or regional/national businesses, as their tax rate is not tied to their income or productivity or wealth generation, but instead as a user-fee upon their use of natural resources. I would also be in favor of an increase in this user fee, in order to drive down consumption of electricity per capita, as long as the fee was redirected into an incentivizing efficiency program that could allow us to weatherize our homes and businesses, making our use of resources more efficient, following Amory Lovins' concept of "NegaWatt", that the cheapest way to pick off the low hanging fruit of energy efficiency and conserving our natural resources is save a watt from being used in the first place.
This efficiency concept, and production of renewable energy sources and managing our growth rates (and efficiently installing all local infrastructure) are going to be necessary actions in the century ahead, not just the next 10 or 20 years. Energy is our life-blood, and without it wealth will vastly decrease in this world. To the extent that some people will win and some will lose if we don't plan ahead, portends significant social problems for our children and grandchildren. I like to think that we are a people capable of thinking far ahead into the future of our now living relatives, and willing to plan accordingly for a happy, comfortable future at that.
I had fun writing this, and I hope no one got the brain freeze reading this.
... written by northsidian , September 25, 2009 - 12:54 am
The employees of LCG my not be up to private pay scales. But the private sector does not even come close in retiree benefits!! Also the retirees of the sheriff dept. do not, I repeat DO NOT pay for their health insurance. So who pays for all these benefits??
... written by Affordable Opinion , September 25, 2009 - 02:27 pm
Jason D. Faulk writes "I hope no one got the brain freeze reading this." -------------------------- Yes, I did.
Jason D. Faulk writes "(In Lieu of Tax) which private IOI's (Investor Owned Utilities)" -------------------------
That should be IOU.
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