Monday, June 09, 2014

HLP Rate Increase, Part II

The Public Hearing was held last week, a few questions were answered by HL& P management.  The Fact Sheet presented by two board members is available here, some meeting videos can be seen here

HL & P DID post some salary and benefit info on their website, however it's projected 2014 figures, rather than actual 2013 which for many individuals was much higher.   The figures are also only Gross pay and benefits.  For a clearer presentation of the benefit package see a more complete view here showing how generous the benefit package really is.

In that hearing on the rate increase, the consultant listed some criteria for determination of the rate.   One was to be "fair and equitable," another was "cost causation."

The proposed increase was portrayed as a straight 4.5% increase for all rate payers.  In fact, it would be - for residential customers ONLY.   For small commercial users, that is only true for the example given (3600 Kwh/month) for the "average" small commercial.  Those using LESS power would get a HIGHER percent rate increase, all using MORE get a SMALLER percent increase.  

Similarly, for this "average" LARGE commercial user it may also be true for the given parameters, but that it somewhat complicated by understanding, and determining, their "peak power" demand.

However, it appears that for the eleven large customers involved there, could and probably will, be SAVINGS of perhaps $50,000 per year.   Is it "fair and equitable" for a 4.5% residential increase and $50K decrease for large commercial?

Then, of course, the last rate increase (a service charge, imposed three years ago) imposed a larger relative burden on the LOW usage customers.    That regressive fee is ALSO proposed to be increase, in addition to imposing one one the small commercial user.

Finally, the rate consultant suggested that rates should be used to decrease peak power and to cause use in the off-peak hours.   How will lower rates for MORE usage, decrease the use or switching to lower use time periods.   HL&P spent over a million dollars on new 'smart meters' which apparently have not yet been 'trained' to offer the supposed benefits.    Time of service use charges might effect tim of usage,

The "Fact Sheet" indicated that only 41% of possible impact fees are being charged.  The impact fee is the cost to Heber Power CAUSED by NEW service.   If less than half of that cost, which is directly attributable to new construction, that means the remainder of the cost is being borne by the current rate payers! 

Increasing the impact fees would garner 100's of thousands of revenue, thus minimizing, or eliminating, the need for a rate increase.

I won't even mention the large amounts of money lost in the credit card fraud and investigation and resultant bonuses, nor will I comment on the faux health care pay fiasco again, but I would mention this comment from HLP management in the recent audit:
  1. "We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud."
See all the new proposed rates here

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