The Lincoln Chamber of Commerce is petitioning Lincoln Electric Systems (LES) to publicly outline a plan to control future rate increases, on the heels of a mid-year budget adjustment.
Chamber President Jason Ball discussed the issue Tuesday morning on LNK Today with Jack and Friends, saying while they support LES in their decision and understand the underlying reasons, local businesses and residents bear the material brunt of the decision and deserve a chance to plan accordingly.
Last week, the LES Administrative Board approved a resolution to amend the 2025 budget and implement a 4% systemwide rate adjustment to fund additional generation for the utility. LES’ regional transmission organization, the Southwest Power Pool, has developed new resource adequacy regulations that outline heightened generation requirements for utilities and are designed to help ensure system reliability.
To avoid significant financial penalties under these new regulations, LES says they must have enough capacity to meet its peak load plus an additional reserve margin. To comply, LES completed a power purchase for a 22-megawatt hydropower plant and two natural gas combustion turbines, which will add 100 MW of capacity.
A visible satellite loop of a snow-covered South Central U.S. in the aftermath of the winter storm on February 15, 2021. (NOAA)
Ball said he personally understand the backdrop of this decision. He was a resident of Round Rock, Texas in 2021 during Winter Storm Uri — the crippling storm which left 9.9 million people in the U.S. and Mexico without power, many due to a major power crisis in Texas. This became the largest blackout in the U.S. since 2003.
“Uri showed the Southwest Power Pool that there can be winter events that take power generation offline,” Ball said. “LES’s decision matrix is why we decided to get involved and say, ‘This is the right thing to do.’ It can take five years to get these generators… so if we don’t take any action now, we might be putting ourselves in a bad spot.”
Balancing this with concerns from businesses and residents over steady LES rate increases, Ball said he understands why people are feeling immiserated.
“From 2018-2022, we had 0% rate changes and even a 1% decrease one year. And that was 2018 through 2022. But now we’ve been on a run of pretty steady increases: a 4.8% increase, a 3.7% increase, a 3.3% increase, and now we’re talking about a mid-year 4% increase. The business community is concerned and I want to be clear about that,” he said.
For this reason, the Lincoln Chamber is asking LES to prepare and discuss publicly a long-term rate strategy that demonstrates how they’re going to mitigate rate increases on a 5-10 year scale.
“They may not have loved us coming out with that perspective,” Ball said. “But I do think it’s a reasonable thing for the business community and rate payers to ask, if we’re going to support LES making important investments when needed — and we think this investment is needed — then people need to be able to plan for the future. Homeowners, renters, and business owners deserve to see a long term plan and strategy.”
The Lincoln City Council will consider the proposed budget amendment and rate adjustment during a public hearing. If approved, rate changes will become effective July 1, 2025. If the rate increase is adopted, an LES residential customer using 1,000 kilowatt-hours per month will see an increase of approximately $4.03 on their monthly bill. Other rate classes would see bill increases varying from 3% to 5% based on individual customer usage.
Customers can find more information on the proposed budget changes at LES.com/Budget.