Lubbock City Council Approves Lubbock Power and Light Rate Stabilization, City Compensation Study

At their meeting Thursday evening, the Lubbock City Council approved a seasonal rate stabilization schedule for Lubbock’s city-owned utility.

Seasonal rate stabilization allows Lubbock Power and Light to add more predictability to customers’ monthly electric bills, and could possibly help customers better weather spikes in power costs.

Under seasonal rate stabilization, customers will have one summer rate and one non-summer rate to cover the utility’s cost of wholesale power, which is called their “Purchased Power Cost Recovery Factor.”

Prior to rate stabilization, the Purchased Power Cost Recovery Factor would fluctuate from month to month. Under rate stabilization, the recovery factor will be fixed, which may well allow LP&L to absorb wholesale power cost volatility instead of drastic changes on customers’ bills.

LP&L plans to implement the rate stabilization plan by establishing a balancing account to absorb volatility. The account will initially be funded with $3.5 million from the utility’s reserves, and will have a $7 million cap.

The utility will be able to project a Purchased Power Cost Recovery Factor to cover the seasonal costs, as wholesale power rates are set annually by Xcel Energy.

Under this plan, the fixed rate will cause LP&L to over and under-recover purchased power costs in order to keep customer bills from experiencing dips and spikes.

Seasonal rate stabilization will allow rates to be more predictable each season, allowing for customers to budget for their bills more effectively.

The Council unanimously approved the measure.

An employee classification and compensation study will also soon be underway for City employees.

The City of Lubbock uses a classification and compensation system to determine pay for employees which was last reviewed in 2005. At that time, the classification system that was recommended was adopted, but other provisions related to compensation were not.

From 2006 until 2011, no changes were made to the employee pay structures, and after 2007, employees did not progress through pay grades, as all increases were tied to cost of living.

Under that system, employees hired at the minimum of their respective pay ranges in 2007 are still making the same as an employee hired in 2013, despite their additional experience.

The City’s Human Resources Department says that the system has made it difficult to recruit and retain employees, and has also resulted in an issue with employee morale.

City Human Resources Director Leisa Hutcheson said that this study was impossible to do in-house, as the City’s Human Resources office currently has half the employees that they did when the last study was conducted in-house.

In the adopted fiscal year 2013-14 operating budget, the city has set aside $125,000 for this particular study.

The Council unanimously approved a base-cost $84,475 contract with Management Advisory Group International, Inc. of Woodbridge, Virginia. Other costs are expected to be incurred as a result of the study as well.