Nathan Stubbs

LUS to make case for rate increase

by Nathan Stubbs

Lafayette Utilities System Director Terry Huval will make the case this afternoon for a utilities rate increase. Huval is scheduled to give a presentation to the council on the issue at 3:30 p.m., two hours before the regular council meeting. The council will not be voting on the issue. An ordinance for a rate increase was introduced in September, then pulled by the Durel administration before it came up for final adoption. Durel and Huval have sensed a lack of support on the council for the proposal, and wanted more time to win over recalcitrant councilmen. "Clearly we needed to spend more time with the council so that they understand why we really need to do this," Huval told The Independent. "We feel this briefing is going make the case for why this is the right business decision."

With rate costs tied to the price of natural gas and coal, LUS argues this is an auspicious time to implement the increase. Huval says fuel costs are expected to drop next year, meaning that even with an approved rate hike, the average utility bill in Lafayette will fall in 2010 and rise as little as .50 and no more than $14 per month, per household, in 2011, when the economy is expected to be in better condition. LUS also wants to take advantage of low interest rates. Not acting, Huval says, could likely result in drastic cutbacks to tree-trimming around utility lines and possible federal fines for Lafayette not bringing its the wastewater system in full regulatory compliance. Also adding to the argument, LUS is one of a select 100 companies to receive a federal grant (totaling $11.6 million) for new smart grid technology that could help the utility become more efficient. However, the grant requires a local match, and without a rate increase, Huval says will have to be delayed.