Walter Pierce

LUS rate increase approved

by Walter Pierce

Who dat say dey gonna raise dem rates? Sporting New Orleans Saints T-shirts, the City-Parish Council approved a rate increase sought by Lafayette Utilities System Tuesday night. The rate hike passed by the narrowest possible margin just before 7:30 p.m. — 3-2 by the Lafayette Public Utility Authority and 5-4 by the full council. LUS customers can expect a 15 percent rate increase spread out over two years that will generate $26 million in annual revenues to account for rising costs of equipment and labor, as well as the utility’s mandated $21 million contribution to an upgrade in the power grid shared by LUS, SLEMCO and other area providers. The average LUS household is expected to see its utility bill increase by $11 per month.

Voting for the rate increase were council members Purvis Morrison (District 1), Jay Castille (2), Sam Dore (6), Don Bertrand (7) and Keith Patin (8); councilmen Brandon Shelvin (3), Kenneth Boudreaux (4), Jared Bellard (5) and William Theriot (9) voted against the rate hike. Council members representing districts 3, 4, 6, 7 and 8 comprise the LPUA.

Two weeks ago the council voted 7-2 in favor of the rate hike as an introductory ordinance; Theriot and Bellard since changed their votes from yeahs to nays.

Before the vote by full council, Huval was grilled by Shelvin and Boudreaux, who have been opposed to the rate hike since it was first introduced last fall and who both represent districts with high poverty rates.

Boudreaux questioned Huval about why LUS had not sought a rate increase since 1998. “Had we asked you last year or the year before,” Huval replied, “we could not have justified it. Our costs compared to revenues were not such that we could justify it.” Huval detailed what he called a “dramatic drop” in wholesale electricity sales by LUS, which sells surplus electricity to other municipalities. The utility was earning as much as $25 million annually a few years ago, but due to limitations in the power grid its ability to supply other municipalities has been increasingly limited. “In the last year it dropped to virtually zero,” Huval said, adding that last year LUS experienced a $9 million loss in net income.

“It just seems sudden,” Boudreaux commented. “Since ’98 to now we never had a rate increase. Maybe we should have.”

Shelvin wondered if a smaller increase could have been sought to “ease the brunt,” as he put it. “One percent of something is better than 100 percent of nothing,” he observed. Later, in indicating that he would not support the rate increase, Shelvin added, “As far as taking care of the people I represent, I haven’t talked to anybody in my district that wanted me to support this.”

After the vote, Huval was understandably relieved. "I'm glad to have gotten the votes," he said. "It was a tough one."

The rate hike will be reflected in bills mailed out in two weeks. Huval added that many customers likely will not notice the rate increase because their utility bills tend to fluctuate this time of year. The engineer added that it "was absolutely necessary that we get these extra revenues so that we keep operating in the way our customers are accustomed to us operating."