Monday, April 9, 2007

How Financial Pain Sharpens Citizen Interest -or- Does It Inspire People to Vote with Their Feet???

My, my, this month's utility bill was so high I thought it was the house payment. Get used to it until all of Alexandria is willing to do a reality check.
How did we get here you ask? Better yet, what are we going to do about it? Well, maybe it is time for you to throw in your two cents.

1. Tremendously escalated natural gas prices used to fuel electrical power generating plants nationwide. Natural gas burns clean and has been used as a replacement fuel in older coal and oil fired plants in order to comply with EPA emission requirements for sulphur - therefore driving up demand for natural gas exponentially.

2. Locally, we as a city are unregulated by the PSC because our municipal body is the regulating body for utility rates. In other words, the city council sets rates and handles complaints. CLECO is regulated as to its rate delivered to the city.

3. Our electrical utilities are set up just as the many other departments that the city must administer and a wise thing was done years back and that was to set each department up as a cost center. The reason this is important to understand is that as a cost center, all income is applied against all expenses and the resulting figure, (that most of us would refer to as a profit or loss) is expressed as a surplus or deficit to indicate possible needs or inefficiencies in that particular department.
That brings us to the simple principle that we buy our electricity which is metered into the city distribution system and then distributed to users as metered service. The difference between the two (and yes there is one) is referred to as line loss. The margin between the two must be marked-up to cover costs as no governmental body can give away a thing of value.
Line loss is the natural loss of electricity that is bled off power lines due to atmospheric conditions, line contact with limbs, and un-metered service such as street lights and power theft. Note that the expansion of incorporated areas has the consequence of additional street lighting and anyone that is receiving power and not paying for it is cost-absorbed by rate-payers .
In the recent KALB utility story, mark-up was highlighted in their cursory review of rates.
This is just a kick off of the discussion and your input and insights are welcome to help identify what has rapidly become a huge negative for the residents and businesses here and anyone that is considering locating to Alexandria.
After all, it has been my contention that government needs to do what it does best in the governmental arena to make our community most attractive while leaving privates sector functions to the free-market. How well this municipal function is managed will have a great impact on future city development . It is all on paper for anyone that understands to have the data to formulate future policy. What say you?

3 comments:

carolyn said...

Hi Spanky,

Thanks for this unique blogsite..

Re: City utility bills; We have Cleco, but we do pay my mother-in-law's city bill. She is in a nursing home. With no usage, her bill was unreal!!!!!!!

C.C.

carolyn said...

Did my blog register?

Spanky said...

Carolyn,
In order to cut down on the insulting replies, this blog operates in moderation mode. naturally there will be a delay until I can review and approve as I am not online 24-7. I do check periodically throughout the day and night so as not to delay unnecessarily.