Contact Us

Lubbock City Council Approves Funding Increase For Lubbock Power & Light Cooling Tower Project

Cole Shooter, KFYO.com

At their meeting Thursday evening, the Lubbock City Council approved increasing funds for a capital improvement project for the City’s utility company.

The Council voted to increase funds for a project replacing a Lubbock Power & Light cooling tower from $3,925,000 to $5,930,000.

The Electric Utility Board voted to handle the increase out of cash reserves, but Lubbock City Manager Lee Ann Dumbauld and Gary Zheng, president and CEO of LP&L recommended paying for it out of bond funds, a measure which the council voted to support.

The City estimates that LP&L will end the 2011-12 fiscal year at a $3.2 million loss, but they do not have the final audited review for September 2012 back from the City’s external auditors.

“The problem in estimating for LP&L at year end is knowing what volume they’re going to sell for August and September,” said Dumbauld.

“Those are high volume months based on temperature, and all they can give the Council or the Board is an average of what that temperature generates in revenue,” Dumbauld continued.

Zheng said he did not support using the EUB’s recommended pay-as-you-go approach to the project increase, due to concerns of possibly dipping beneath their general reserve requirements of at least three months gross revenue from all retail electric sales, which is around $50 million.

City staff said the cost increase was due to multiple factors, including the cost of labor going up due to the oil and gas boom in midland, causing a labor shortage and a price increase for labor.

The utility also reportedly had to bring in an outside structural engineer to design the cooling tower, and the engineer recommended a structure designed to withstand a 140 mile per hour wind, as opposed to a 100 mile per hour wind.

The structural engineer had to be hired due to the City’s commercial building inspection permit process, but there was some confusion on whether or not LP&L was exempt from the City’s permit process.

Matt Wade, general counsel for LP&L, said that he believes there is a permit exemption available to the utility, but did not know why they were required to go through the permit process for this particular project. LP&L staff has been instructed to look into possible exemptions.

Lubbock Mayor Glen Robertson weighed in on the utility’s situation, saying “This board 60 days ago was told to expect a six and a half million dollar loss. Thirty days ago, they were told to expect to break even or better, and yesterday, we’re told they lose $3.2 million. So in less than 60 days, we’ve got a $10 million swing in estimating our year-end gain or loss.”

“This one project had a 51 percent increase in cost estimate. We’re doing something wrong. We’ve got to address these issues,” Robertson continued.

The measure passed 6-0, District Four Councilman Jim Gerlt absent due to illness.

More From KFYO

Best of the Web

Leave a Comment

It appears that you already have an account created within our VIP network of sites on . To keep your points and personal information safe, we need to verify that it's really you. To activate your account, please confirm your password. When you have confirmed your password, you will be able to log in through Facebook on both sites.

Forgot your password?

*Please note that your points, prizes and activities will not be shared between programs within our VIP network.

It appears that you already have an account on this site associated with . To connect your existing account with your Facebook account, just click on the account activation button below. You will maintain your existing profile and VIP program points. After you do this, you will be able to always log in to http://kfyo.com using your Facebook account.

*Please note that your points, prizes and activities will not be shared between programs within our VIP network.

Please fill out the information below to help us provide you a better experience.

Register on News/Talk 790 KFYO quickly by logging in with your Facebook account. It's just as secure, and no password to remember!

Not a Member? Sign Up Here

Register on News/Talk 790 KFYO quickly by logging in with your Facebook account. It's just as secure, and no password to remember!