Las Cruces Utilities proposes to increase rates 75% for small businesses and 30% for residential customers, largely to fund gas-line expansion, despite the trend toward renewable energy. Chambers of Commerce question the wisdom of expansion, and say any rate hike should wait ‘til businesses recover from pandemic problems and a temporary storm-rider.
As we create a sustainable energy future, natural gas will play a diminishing role. The City Council has resolved to utilize more and more solar energy, and has discouraged gas expansion.
Utility rate cases are complex. Customers and the public need representation. Until 2016, LCU rate hikes involved an adversarial process: a taxpayers’ advisory council studied the request with an attorney and a consulting expert to ensure it was justified. Sadly, that process was abandoned.
The proposed hike would fund $11.6 million in gas development, including nearly $6 million to extend lines to serve new customers in Talavera. When I still lived in Talavera, ten miles from town, the propane company checked our tank constantly, topping it off when necessary, and we never ran out. We heard that LCU lines might someday reach us, but doubted we’d spend $5,000 to hook up.
LCU wanted new customers in Talavera; but Talavera didn’t want the Utility quite so much. An independent study funded by the Green Chamber of Commerce notes that LCU's economic justification assumed that eventually all 960 parcels in Talavera, many still undeveloped, would choose LCU, although some folks seem content with propane or balked at the $5000. A survey by the Utility reportedly found 419 potentially interested owners. Just 19 have actually hooked up. Some say the survey accidentally implied that the $5,000 would be waived. (A Utility official involved recalls no such thing.)
Existing customers will pay big bucks, depending on numbers of Talavera customers. Assuming those 419 signed up, the actual cost per hookup would be $14,000. LCU (existing rate-payers) would front $8-9,000 per new customer, gambling that revenues would cover that; but it would take decades of revenues. If 210 sign up (on which I’d bet the “under”), existing customers pay $23,000 per customer ($4.9 of the $5.8 million).
Ratepayers would fund extending natural gas lines so Talavera residents could switch from propane to natural gas for a decade before natural gas gets phased out. As the affluent turn to solar, poorer customers will be left paying higher rates. Maintaining the expanded system will be more costly, and there’ll be fewer customers to pay the bill.
LCU argues that the investments are amortized over time, and that some are for future “redundancy.” LCU plans to connect the lines to form a huge circle around the area, so the gas could reach a customer from either direction; but that’s planned for 2030. (Will we still be building gas lines then?) LCU also says that when utilities build infrastructure, it’s generally utilized later, with development infill, changing rates, and other factors.
I’m seeing a collision of two worldviews: one that global warming mandates we rapidly exit fossil fuel dependence; and a utility bureaucracy doggedly expanding the customer base, reasonably citing actual past experience – without fully recognizing we may be playing a whole new ballgame. Our City Council understands that, I think.
If you’re a ratepayer or small business, or just think this is wrong, feel free to comment on all this to your councilor. Or attend the LCU Board Meeting September 9th at 3 pm.
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[The above column appeared this morning, Sunday, 29 August 2021, in the Las Cruces Sun-News, as well as on the newspaper's website and KRWG's website. A related radio commentary will air during the week on KRWG (90.7 FM) and KTAL-LP. (101.5 FM – http://www.lccommunityradio.org/), and will presently be available on demand on KRWG’s site.]
[I should thank both Phil Simpson and Joe Provencio for their time spent talking to me about this. I’m no expert, and they were patient. Simpson's report for the Green Chamber helped, and I’ll try to add a link to the Utility’s written response. (We also may try to arrange for them to discuss these issues on our radio show, "Speak Up, Las Cruces!" on 101.5 FM, before the City Council considers this.) I’m told that the phenomenon seen here - policymakers recognizing the urgency of the need to move toward sustainable fuel sources, but utilities sticking to their usual ways – is not uncommon around the country these days.]
[Certainly it is possible that our ideas about the shift from fossil fuels are too optimistic, and that the redundancy (connecting that big circle) might someday spare customers an interruption of service if bomb, accident, earthquake, or sabotage took out a line. So utility officials have a duty to consider the possibilities and figure out the practical solutions they’re working on; but city officials have a duty to constituents to make the right decision both for customers’ purses and the environment. Here, I’d guess that that duty means saying “Thanks, but no thanks!” to some or all of this further indebtedness.
Had the old process been in place, the Customers Advisory Group (UTAG) might have been well-advised by counsel and their own expert and warned against this step. I attended a recent UTAG meeting where that board did hear from the chambers and Mr. Simpson voted 3-2 against recommending a 20-month delay, then 4-1 to endorse the Utility’s plan. I thought the board members were a little at sea, and though they had assistance on parliamentary procedures from City Attorney Jenifer Vega-Brown, she couldn’t advise them either way on the substantive issues. This time, the Green Chamber of Commerce stepped up to provide a counterweight to the Utility’s proposal and analysis; but if the proposed rate hike had affected primarily residential customers, who would have stepped up?]
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