Directors will instead consider how to begin such yearly contributions at a later meeting, allowing the full board time to consider the proposal.
"I'm not opposed to going ahead and paying a franchise fee if we can afford it and it's based off how well we do," director John Zwaicher said. "I'd just like to look at it longer since this all got thrown at us."
The proposal worried several council members, who Tuesday seemed focused on using the money to fund Citibus and pay increases for firefighters, police and other city employees. The council must change city ordinance to allow such a transfer of funds.
The council passed an ordinance in 2004 delaying contributions the municipally owned power company would normally pay, allowing the utility to recover from economic disaster.
A spike in gas prices and years of councils spending down the utility's reserves to keep taxes low nearly bankrupted the company and its owner, the city of Lubbock, in 2003.
The utility instead focused on rebuilding its reserves - money set aside to cover future disasters. City ordinance requires LP&L have $50 million tucked away before it resumes annual contributions to the city budget.
The utility is halfway there. Unaudited estimates put the reserve at more than $30 million as of Oct. 1.
Directors will consider at a future meeting a proposal Mayor David Miller supports that would phase in franchise fees as the utility builds its reserves.
Miller thought the directors made a good decision, as long as the board later deliberates a formula to determine contributions instead of setting an arbitrary amount.
"The fact that they did not adopt a new formula for the short term is OK," Miller said. "But it does give us plenty of time these next several months to work on that graduated formula that I think's important."
A majority of the council seemed leery of a transfer instead of a franchise fee. Jim Gilbreath and John Leonard were glad to have the money, with both preferring franchise fees but deferring to the board's judgment.
But the transfer concerned councilwomen Linda DeLeon and Phyllis Jones and councilman Todd Klein, all who said they believed the utility should pay a scheduled fee rather than transfer an arbitrary amount of money.
DeLeon said the city and the utility needed to stick with the reserve plan written into ordinance. Jones and Klein said they believed the utility healthy enough to begin payments but that the payments should be organized.
DeLeon and Jones didn't think the city should accept a transfer. Klein considered it a start.
"It's a step in the right direction toward a formal franchise fee," he said. "I certainly think they should start paying a franchise fee as soon as possible."
The money likely will fund Citibus and pay increases for firefighters and police. Several council members also support increasing salaries for city employees by 3 percent, rather than the proposed 2 percent.
The council meets to consider the budget Thursday.