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City-owned utility in Lubbock, Texas, to absorb 24,000 retail customers from Xcel Energy Page 2 of 2
<br />In years past, Lubbock Power and Light had about half the city's electricity customers, but in recent
<br />yeazs, thanks to good management, the municipal utility has enlarged its share, Martin said. "Slowly but
<br />steadily, the customer mix changed, until we had 75% of the business," he said. Xcel, left with only
<br />25% of the customers, found it had become very costly to maintain its lines, he said.
<br />By the late spring of 2008, Xcel executives "were ready to exit," Martin told Public Power Daily.
<br />Negotiations began in June that year, and ended in August 2009. A deal was announced last November,
<br />and the transfer should happen by this November, he said. Xcel Energy, which does business in Texas
<br />as Southwestern Public Service Co., will continue to supply wholesale power to Lubbock.
<br />"We think municipal electric systems make a lot of sense for the consumer," Martin said.
<br />For the last six years, Lubbock P&L's residential rates have been among the lowest in the state of Texas,
<br />said Chris Sims, public information officer for LP&L. In 2010, excluding franchise fees and taxes, the
<br />municipal utility's residential rate for 1,000 kWh has averaged $83.21 per month, he said.
<br />LP&L CEO Dr. Gary Zheng credits the ufility's success to its increases in efficiency, local control,
<br />voluntary citizen boazd of directors and excellent customer service as the primary reasons for LP&L's
<br />success.
<br />Some residents voiced opposition to the buyout, worried that their rates might go up as a result, Sims
<br />said. "No one likes the term 'monopoly,' he said. But LP&L has published information about its rates on
<br />its website, and this has helped calm feazs, Sims said.
<br />The city-owned utility said it will finance the purchase of Xcel Energy's power poles, lines and
<br />substations with electric revenue bonds, allowing its electric rates to remain among the lowest in the
<br />state.
<br />"We want all our customers to know that your electric rates will not increase as a result of this new
<br />relationship," W.R. Collier, chairman of the LP&L Electric Utility Boazd, said last November, after the
<br />city reached the agreement to take over service to the Xcel customers.
<br />"Our community is very proud" of having its own municipal utility, said Martin.
<br />Municipal electric utilities might make even more sense in the future than they have in the past, the
<br />mayor added. "I've heard many investor-owned utility executives saying they want to re-orient," get out
<br />of the retail electricity business, and focus more on production and transmission, he said. -JEANNINE
<br />ANDERSON
<br />http://www.naylometwork.com/app-ppd/articles/print-V2.asp?aid=122627 8/2/2010
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