LIBA would like to make four observations regarding the 2013 LES budget.

#1 – LIBA is opposed to the new “Cash for Clunkers” program which is intended to provide incentives for people to purchase a new refrigerator. Charging every Lincoln resident more for their electricity so that a few residents may receive money to purchase a new refrigerator is not appropriate. The amount of money going into this program may seem inconsequential at $180 per refrigerator, however, LIBA worries about the precedent of starting more “cash for clunker” type programs. Further, the program requires that the subsidized refrigerator replace a garage refrigerator. The location of the replaced refrigerator is an arbitrary, immaterial, and easily manipulated distinction. Unless LES focuses on achieving their actual goal, lowering energy consumption, instead of arbitrary factors such as the physical location of the refrigerator this program is vulnerable to blatant abuse. Someone may be tempted to move their refrigerator, often only a few feet, from the kitchen to the garage and back if the result is free money.

The LES 2012 budget allocated $3 million for the Sustainable Energy Program. As of October 2012 this fund still contained an unclaimed and unallocated $800,000. Given the possible overfunding of the program we suggest lowering the 2013 allocation for the Sustainable Energy Program from $3.3 million to $2.3 million.

#2 – Lincoln media has been reporting that the 2013 rate increase is only 2.6%. This is accurate as it pertains to the overall picture. However, LIBA would like to point out that some local businesses and industrial users are going to be paying 8 to 9% more next year for electricity. Many of these businesses are our larger employers and are providing thousands of jobs for Lincoln. Last year, the rate increase cost companies like Veyance, which has over 550 employees, an additional $150,000 a year in electric rates.

Lincoln is no longer the lowest cost power supplier for some businesses. For example, in the past, LES boasted the lowest electric rate for large commercial businesses. Today, LES’s rates have fallen behind with Des Moines, Omaha and Kearney now providing cheaper power. Where an average large business in Des Moines will have a bill of $9,500, the average in Lincoln will be $14,400.

#3 – LIBA is speaking as a voice of caution, warning LES to be conscientious in its spending. We encourage LES to look to its travel and training budgets for savings. We encourage LES to consider the wisdom of spending another $1 million to purchase expensive wind energy when the purchase is not required and the same power can be purchased for less than half the price. LIBA is not opposing the millions of dollars we currently are spending on wind or the millions being spent on other renewables, we just oppose the increase.

#4 – This year LES has generated nearly $5 million more in net revenue than expected. In July LES was $2 million dollars ahead of net revenue projections, and since then revenues have only increased. Today, LES has $5 million more in net revenue than budgeted. These funds are not allocated in the new budget. LIBA would recommend allocating at least half of the $5 million soften the rate increase.

LIBA has been told that LES will likely lose the extra $5 million before the end of the year. You may recall that last year LES had a $2 million surplus, however, LES did not reveal that fact until 4 days after the City Council approved their rate increase. We would not want to see something similar happen again this year.
If revenue projections change, LES has the ability to cover a shortfall with its rate stabilization fund. Allocating just half of this surplus revenue will lower the rate increase by 1%.


LIBA studies and promotes these types of issues that are important to businesses and our community.  If you have an interest in joining LIBA, please call me at 466-3419.  LIBA membership is not restricted to just businesses.  We also have “individual” memberships for those who want to help influence our local government decisions.