City Council Gives Initial Approval to LP&L Changes
Customer refunds would no longer be required under the amended ordinance, rather allowing LP&L to simply have the option out of the General Reserve. The ordinance, if approved on second reading, will read that any General Reserve may be refunded to the taxpayers, as opposed to the current ordinance which says that remaining net operating revenues shall be refunded.
Also initially approved is that LP&L’s General Reserve must be equal to three months gross revenue generated from all retail electric sales, and the reserve rate must be met by the end of the fiscal year. The council also amended how the funds are considered from LP&L’s net working capital. Under the amended ordinance, the reserve would be 25 percent (three months) of LP&L’s current assets minus the current liabilities, but would exclude customer deposits from current liabilities. The current General Reserve is 4 months revenue.
The council also approved the first reading of an ordinance which would give more power to the City of Lubbock’s Electric Utility Board. The ordinance would make the office of the director of electrical utilities directly responsible to the Electric Utilities Board, and the EUB may also request that the City Council alter the fee structure.
These changes will not go into effect until the Council approves the second reading of the ordinances at a future meeting.
$18,552,000 of LP&L funds will also be used for electric capital projects for downtown redevelopment, including $425,000 for Fiscal Year 2011-2012 to run underground electric lines in downtown Lubbock. The Downtown Redevelopment Underground project is expected to be completed in September of 2015, and cost LP&L a total of $1,285,000.