My Turn: Liberty Utilities is a wolf in sheep’s clothing
EDITOR’S NOTE: This guest column originally appeared at http://www.tahoedailytribune.com on Tuesday, Feb. 4, 2014.
For all customers of Liberty Utilities (80 percent reside on the California side on the Lake Tahoe Basin), the Canadian-owned utility giant has found a place to charge ratepayers 20 percent and guarantee themselves a net return of 10 percent. It is here, and it is now.
The Tahoe Daily Tribune (January 21) and the Sierra Sun (January 22) just published an article about the rate impact of Liberty Utilities’ strategy of unprecedented general rate increases for their operations and system expansion.
A Liberty official reportedly said they received approval from the California Public Utilities Commission (CPUC) for “about $12 million, triggering about a 4 percent rate average rate increase.” This statement is patently false and misleading to all ratepayers.
According to the CPUC’s final decision documents (Proceeding A1202014), Liberty received a $12.5 million revenue increase of which only $3.75 million was paid for by the 4.6 percent average overall increase in rates. The $8.7 million difference was paid for, or offset, by keeping the over-collection of lower wholesale power costs.
Remember National discussions of the power dividend due to lower natural gas costs and lower generation costs? That dividend was intended to lower the retail cost of power, but not for us. Liberty absorbed that dividend into their general rate increase to make it look like rates went up only 4.6 percent.
The CPUC decision (page 4) explains, “The seemingly small reduction of 18 percent in energy cost-related rates in fact offsets a large portion of the 47.2 percent increase in non-energy or “base” rates which results in a net change to revenue requirement of only 4.6 percent.
Liberty actually increased their non-energy base rates 47.2 percent and most of us were unaware that we should have had a significant reduction of overall rates.
Now Liberty is spending money on various “upgrades projects” that will raise the non-energy base rates even higher. The 650/625 line Upgrade Project is only one project that would easily raise the non-energy base rates 20-30 percent.
Liberty has no control over the wholesale cost of power, and when wholesale power costs rise it will be immediately passed through to ratepayers. Liberty will simply say they have no control over wholesale power costs, and they will be correct.
But they do have control over increases is non-energy or “base” rates, how quickly upgrades are made, and how they are funded. It’s time to remove the sheep’s clothing and demand full accountability.
Dave McClure is a Reno resident, president of the North Tahoe Citizen Alliance and a North Tahoe business owner.