AVALANCHE-JOURNAL

Operate LP&L like a business?
 

One of the first decisions many new residents of Lubbock have to make is which electric company to use.

Except for some newly annexed areas in Southwest Lubbock, the majority of the people here have the option of having Xcel Energy, formerly Southwestern Public Service, or Lubbock Power & Light provide the power to turn on the lights at their home or business.

Cities in Texas and across the nation, outside of a handful, are generally served by one power company. Lubbock, for as long as I can remember, has had competing utilities.

Although it’s difficult to believe while looking at a triple-digit electric bill during June or July, this competition has resulted in our city’s having some of the lowest electric rates in the country.

Three decades ago the two companies would battle for customers. Southwest Public Service would trumpet how much it paid in taxes to the city and county governments. LP&L, not required to pay property taxes, would point out that it is the home-owned utility and that its revenues kept property taxes lower.

There’s the rub that has some in Lubbock wondering about the future of LP&L.

LP&L’s “profits’’ were used to underwrite city government. Some, with Lubbock Council members Gary Boren and Tom Martin leading the charge, believe that the city was putting LP&L’s future at risk by taking money that wasn’t there and using it to fund city services.

Boren told an eight-member citizens committee created to examine whether LP&L can be removed from direct city control that he wants a referendum added to the regular May 15 elections that would allow the Council to restructure LP&L.

As it used to be, and technically can still be except for the additional interest that Council is paying to fund transfers, city staff could “grab’’ money from LP&L’s coffers to help underwrite the city’s budget.

On the surface that sounds great. After all, the taxpayers “own’’ the utility and should be paid a “dividend’’ when a profit is made. However, sometimes a “dividend’’ may have been paid at the instruction of the city manager even when there wasn’t a profit.

According to a story in Wednesday’s A-J by reporter John Fuquay, LP&L leader Carroll McDonald, who ran LP&L from 1979 to 1994 and returned last Spring on an interim basis, said that a new fleet of LP&L trucks once was split among other city departments in the following year’s budget, forcing the utility to replace its fleet after only one year.

LP&L also would replace damaged utility poles, but the insurance payments for the damage were placed in the general fund.

Boren, Martin and others want to run LP&L more like a business, and they are using University Medical Center, the county-owned hospital, as a model.

“What I want to do,’’ Boren said, “is take the politics and the city manager and the City Council out of the mix.’’

With voter approval, Boren wants to establish a separate board that would set the policy and budget directives for the utility with the Council retaining rate-setting authority and budget control.

The utility’s general manager would report to a Council-appointed board and not to the city manager, under Boren’s plan. The utility would pay the city a franchise fee comparable to the amount paid by Xcel.

On the surface, with plenty of details to be worked out, it seems like a good idea.

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Lubbock Power & Light, a municipally owned entity of the City of Lubbock is separately governed by an Electric Utility Board appointed by the Lubbock City Council. LP&L has approximately two hundred employees working toward generating and distributing electrical service for the citizens of Lubbock, Texas. LP&L distributes over 85,000 monthly utility statements for electric, water, sewer, solid waste and storm water services. LP&L serves over 70% of the electric market in Lubbock, Texas.

Media: Chris Sims (806) 775-2502