LCRA: Extra charge is not a mistake; charge supplements cost-of-service provisions
Aug. 15, 2014 at 6:06 p.m.
An extra charge on some utility bills was no mistake, according to a Lower Colorado River Authority officials.
Cooler weather in 2013 is to blame for the cost hike.
"Last winter was exceptionally cold, which resulted in higher-than-expected costs for fuel and power," Clara Tuma, public information officer for the LCRA, said in a prepared statement.
For residents in Cuero, Hallettsville, Shiner, Moulton, Yoakum, Gonzales and Schulenburg, that means a few extra dollars tacked onto their monthly bills.
The LCRA is a cost-of-service provider, Tuma explained, which means it charges its wholesale power customers actual costs. The authority uses estimates for fuel and power costs by forecasting energy needs to meet load requirements as well as natural gas, coal and power prices.
"This has been a feature of LCRA's agreements with all of its customers for years," she wrote in the statement, adding that corrections like this are common.
"The higher-than-expected fuel and power costs in the last fiscal year were due in large part to the high electric demands and market prices during the very cold months of January, February and March," she wrote.
These higher costs will be shared by all LCRA electric customers, totaling in the millions.
All customers have the same opportunities to pay the bill within the next two years, she said. However, Tuma declined to disclose how much customers are paying to the authority, citing confidentiality rules.
Jason Cozza, city secretary/administrator in Hallettsville, said residents already have started paying the additional charges that will go toward the underpayment from last year.
He said the charge for Hallettsville is about $360,000. He estimated the charge to be about $4, which is labeled under the energy generation expense for every customer of the city utilities.
The city was notified earlier this summer, and residents have started paying the charge in the past billing cycle.
"In general, people don't like having their bills go up; you can expect them to not be happy," he said.
To help alleviate some of the stress residents experience, Cozza said, he's made sure his staff is educated and that residents are aware of the billing.
"It could go up, or it could go down, and in this case, it did go up," he said. "It can work the other way."
In the instance the costs end up being less than the initial estimates, Tuma said customers would receive a credit for the difference.
Kevin Coleman, Yoakum's city manager, said the estimated unbilled fuel charges to LCRA are about $630,000. To offset that expense, he said customers will see a small increase in their monthly bills beginning this fall.
"It's about $2.10 per month on average," he said. "We have chosen to defer repayment to start in October to lessen the burden on our customers with summer bills."
Theresa Bowe, Yoakum city clerk, said she hopes the additional charge in October doesn't come as too much of a surprise.
"I hope it doesn't really impact anyone in a negative way," Bowe said.
Raymie Zella, Cuero's city manager, said residents will see a $3.75 hike on their bills beginning this month, possibly for the next two years, according to an article in the Cuero Record.
Cuero is expected to pay an estimated $949,000 because of the shortage.
Attempts to reach Cuero and Shiner officials were unsuccessful.