Providing reliable electric service to the city of Lompoc isn’t free; one candidate for mayor couldn’t seem to grasp the fact that the cost of everything from eggs to electricity is going up.
The electrical distribution system in Lompoc is a publicly owned utility (POU) consisting of above- and below-ground equipment, including wire, poles, conduits, transformers, and switch gear.
To provide reliable service, all this equipment must be maintained and eventually replaced when it is nearing the end of its service life. If not, there will be outages as equipment fails.
As the Oct. 1 staff report says: “The benefits of being a POU go beyond the monetary costs to customers. Having a staff of dedicated, local line workers aid in greater reliability of the city’s distribution system.”
When the demand for electricity increases the distribution system must be upgraded to handle the new load.
Recent state mandates for conversion to all electric vehicle fleets are one example of creating and increase in demand and the recent development of so-called AI technology is another.
For example, one city staffer familiar with future electricity demands caused by EV charging stations in residences and businesses estimated the city utility would have to double the number of transformers and upgrade the cabling system to handle the increased load.
This one action would require millions of dollars and many months to complete; supplies and equipment resources would be hard to find because other communities would be facing the same challenge.
Rate increases are based on a detailed cost of service study (COS) performed by independent analysts using accepted industry standards.
The study was aimed at several “customer classes,” including residential, commercial and industrial. Eventually, seven customer classes were identified, and these were divided into tiers based on monthly usage.
Then the income/expense portion of the utility was examined in detail; the outcome was to predict revenue, reserve funds, debt and other factors to arrive at equitable and justifiable rates for each customer class.
But according to the Sept. 17 minutes, the guy who’s running for mayor objected for the need for rate increases saying, “The proposed rates in this study could be lowered because he believes electrical usage will increase with State requirements for the household appliances to be electrically powered.”
This would increase utility income as the result of eliminating natural gas for heating and cooking. This would increase utility income as the result of eliminating natural gas for heating and cooking.
He may not have realized that if these and other state mandates are implemented the rates need to be increased to recover the cost of future system upgrades and current increases for electrical power.
Eventually, the City Council approved a modest rate increase; at my house that would be about $5 a month.
So, what’s the bottom line here? For decades the utility rates in Lompoc have been substantially lower than in the surrounding service areas and the reliability of our electrical distribution system is far better than the PG&E service in the area.
For example, when a rare unplanned outage occurs in Lompoc it’s usually fixed, day or night, within a couple of hours. In the PG&E areas it can take longer than that for a service crew to arrive and begin to assess the situation and even longer to fix it.
I usually complain when taxes or fees go up, but in this case the rate increase seems justified. Even with the increase, all electric bills in Lompoc will remain well below the surrounding PG&E rates (see pages 18 and 19 of the Oct. 1 staff report).
References:
Lompoc Raises Annual Electric Rates | Local News | Noozhawk
Sept. 17 minutes, Item #13: 42030 (cityoflompoc.com)
Rate design report: Lompoc Electric COS 2024 V4.6.xlsx (cityoflompoc.com)
Oct. 1 staff report, see page 18: 638630286192200000 (cityoflompoc.com)
