Wednesday, February 03, 2010

LUS wins rate increase, smart grid

Well, LUS won its rate increase...about 15% over two years, the first rise in electricity costs since 1998. If you want to see the sausage being made you can tune in to AOC or download the video off UStream.

The central story tomorrow will be that increase, of course. And that is probably all you'll see in the papers. I'll leave any detailed reporting on the back and forth to them.

On the other hand, I expect that there'll be no reporting on the sidelight issue of the status of the smart grid funding and I'll take that up here. (If you've not followed this you can catch up the earlier posts on the issue: 1, 2.) The smart grid package, which includes both water and electricity utilities will go forward and the Feds will cough up half the money necessary to pay for communications infrastructure and the electrical side's new meters—11.6 million dollars. It's a great deal. But if the rate increased had failed, as it initially appeared to have done, then LUS would have had to turn down the stimulus money that would have made the smart grid deal so attractive for Lafayette. With that would have gone the opportunity for the service improvements that would come with the utility having instant, detailed information on the status of every customer and the potential for home owners to save money by actively managing their consumption.

There was a fair amount of back and forth on this topic and it's apparent that LUS believes that the grant money is still there and that with the approval of the rate increase they will have no trouble convincing the Feds to turn over the money they have won.

Now that the money has been secured I'm hoping for more interesting news sooner rather than later on just which information technology will be used to connect the meters to the network. Whether it will be wired or wireless will be the first question and the answer will shape the future of the LUS communications division....stay tuned.

Update: The local and regional media has weighed in and as I suspected there no mention of the 11.6 million dollars in federal lagniappe that goes with the decision. From the Advertiser: "LUS rate hike OK'd" and from the Advocate: "LUS rate hike wins approval." From the Independent: "LUS rate increase approved."

2 comments:

Mike Stagg said...

Part of the reason for the lack of coverage on the smart grid issue can be attributed to the fact that Terry Huval totally discounted the value of the program during his campaign to win the rate increase. He did that repeatedly before the various groups and organizations to which he pitched the need for the rate hike.

This after having a team of his staff spend months putting the application together and after years of him talking about how the LUS Fiber system would allow smart grid technology to transform LUS and the city.

It was all part of the basic dishonesty behind the selling of this rate hike.

Mr. Huval made a big deal warning of the terrible consequences that would befall the poor of the city if his rate hike did not go through. Like his temporary embracing of the digital divide issue during the fiber fight, he used these folks that he otherwise has nothing to offer — except, now, higher rates for electricity, water and sewerage.

Under Mr. Huval, LUS operates just like a for-profit utility, totally oblivious to its other obligations to the community beyond that of serving as the cash cow for local government. LUS still has no fulltime energy conservation staff (something that could help decrease demand by encouraging businesses and residents to make better use of insulation and efficient tools and appliances), and it is the co-owner of a coal-fired plan in Boyce that contributes to the mercury contamination of Louisiana lakes, rivers and bayous (last time I checked, the Department of Environmental Quality listed 38 such bodies of water as having fish too mercury-rich to be eaten by pregnant women and/or children).

If smart grid technology has any appeal to LUS it is because of the technology toys it will afford the engineers there the opportunity to play with. Oh, and it might allow them to layoff some non-engineer types, too.

The LUS business model and mindset is firmly rooted in the 1970s. The smart grid stuff isn't really aimed at Lafayette. I believe it is aimed at winning more kudos from the various trade associations of which LUS is a member. At some point, the focus of LUS needs to return to the needs owners — and I'm not talking about the council, but the broader community.

Gene said...

So are you really saying that you think the smart grid is a bad idea, or are you just against the rate hike?

Everyone is entitled to their opinion of course, and I am of the opinion that a smart grid would allow me to conserve energy. Yep, I jumped on the fiber bandwagon when it was offered up. I voted for it, and I now have it. I believe fiber is good for Lafayette's future growth, and its saving me money over what I was paying for triple play before. I believe the smart grid would also benefit Lafayette and its residents. If we truly can go to time of use pricing, its something that can truly push folks to be energy conscious. Reading how time of use pricing works in other places, I know I could save cash in my pocket over the flat pricing we have now.