BPU recommends gas rate change

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By Arin McKenna

On Wednesday, the Los Alamos Board of Public Utilities voted 5-0 to recommend a change in the way gas rates are billed.

If council approves the new ordinance at its Aug. 13 meeting, customers will be billed for the actual cost of gas instead of at a fixed rate.

The current fixed rate billing makes it difficult for the Department of Public Utilities to adjust to fluctuations in the market.

Customers are charged at a higher rate than the estimated cost of gas in order to build in a cushion to cover unexpected price increases.

Under the proposed change, customers would be billed a fixed rate per unit to cover operational costs plus the actual cost of gas. This could save customers money when rates are low, but higher gas rates would also be reflected in the billing.

Two citizens spoke against the change.

“What I object to mainly is the idea of the citizen not knowing month to month and having to look at differences all the time,” one citizen said.

He suggested that even if it meant building in a larger cushion, DPU should keep the fixed rate, or alternately could contract with suppliers for two to four years or purchase gas on the futures market.

Board member Chris Ortega, who has negotiated long-term contracts with suppliers, was opposed to that idea.

“If suppliers are going to commit to two, three, five years, they’re going to protect themselves. They’re going to inflate the price,” Ortega said.

June Gladney, purchasing manager for Los Alamos Public Schools, also objected to the change. “Any time you raise the utility rates you’re taking money from our classrooms,” Gladney said.

Gladney also expressed concerns about billing. In order to keep bills manageable, the fixed rate and variable rate will be combined. An estimate of the price of gas for the upcoming month will also appear on the bill.

Customers will be able to find explanations of all the various charges on a county webpage.

For recordkeeping purposes, Gladney requested a detailed breakdown of all costs either on the bill itself or in the customer’s online bill. Utilities Manager John Arrowsmith said that staff would look into the possibility of making that information available online.

The board’s new member, Stephen Tenbrink, was concerned about how the rate could affect customers with limited means, especially if gas prices spiked in the winter.

Deputy Utilities Manager for Finance and Administration Robert Westervelt responded that DPU has assistance available for winter utilities costs and also works with customers on payment plans if they get behind. There are also several nonprofit assistance programs available.

BPU Chair David Powell noted another advantage of the change.

“Bond rating agencies look favorably upon a utility that is ready and able to quickly react to changing costs of situations,” Powell said.

The board also discussed objections by approximately 20 customers to having Smart Meters installed in their homes as part of the Smart Meter Demonstration Project. DPU has installed 1,600 meters at homes on Barranca and North Mesas as part of the project.

Powell was concerned that if customers were allowed to opt out now they would claim it as a precedent if DPU decides to make Smart Meters the standard meter in the future.

Westervelt pointed out that if DPU adopted Smart Meters universally, allowing customers to opt out would incur expenses such as sending meter readers to the residence and having staff trained to install and troubleshoot two different metering systems.

Arrowsmith also noted that the analogue meters are less accurate than the Smart Meters, and that DPU has the authority to select appropriate equipment for its operations.

County Attorney Rebecca Ehler suggested a solution.

“Tell those wanting to opt out that for now this is a demonstration project and we’re not going to impose this on anyone who doesn’t want it, because this is strictly for demonstration, and that this isn’t a statement about our permanent equipment whenever that may come up,” Ehler said.

The other major item of business was discussion of a Master Plan for a nonpotable (NP) water system developed for the county by Forsgren Associates Inc. Follow the Los Alamos Monitor for more on that story.

In other business:
• The Charter Review Committee looking into the DPU structure is close to making recommendations. The board voted to schedule a special meeting with the CRC at 5:30 p.m. Aug. 1 to discuss the proposed changes. The CRC will hold a public hearing on the draft proposal on Aug. 12.
• Arrowsmith announced that owners of the San Juan Generating Station will hold their quarterly committee meeting in Los Alamos next week. This is the first time the committee has met in Los Alamos. They will be discussing how to implement their agreement to shut down two of the four generating stations at San Juan.
• Arrowsmith also announced that NEDO (New Energy and Industrial Technology Development Organization) has asked to extend its Memorandum of Understanding with the county for an additional year, until March 2015. An attorney representing the county is currently reviewing the memorandum, which will have to be approved by both the board and the council.
• A review of salaries at the hydroplant has resulted in some recommended salary increases. Human Resources will be taking those recommendations to council next month.