By Theresa Phillips
As we say goodbye to 2023, we are taking a moment to reflect on the opportunities we have welcomed and the challenges we have faced. As an organization, we recognize that both give us a chance to grow and learn and to always do better than before.
General Manager Search
This year brought a change in leadership to the district. The board of directors, with guidance from the National Rural Electric Cooperative Association, began recruiting a new general manager. NRECA’s Executive Search Team met with the board of directors in July to discuss the process and identify the needs, wants, and desires of the board.
“Hiring a general manager is the most important decision that a board makes, and we take this responsibility as a challenge to build on Lassen’s reputation and enhance its future performance for our customers,” Lassen Municipal Utility District (LMUD) Board President Fred Nagel says.
The board is committed to finding the best fit for our community and utility. We expect a new general manager in early 2024.
Beneficial Electrification
Beneficial electrification is a hot topic in California. It is the process of upgrading carbon-emitting equipment to newer, more advanced, cleaner electrical alternatives. A good example is replacing carbon-emitting diesel agricultural pumps with energy-efficient, electric-powered pumps. LMUD has incentive programs that help offset the cost of replacing equipment, benefiting local farmers and ranchers, and improving air quality in our community.
We also offer incentives for customers who wish to invest in electric vehicles and charging stations. We realize that electrification is not for everyone, but as your trusted energy advisor, we are here to offer advice and guidance.
With the adoption of new technology, there are concerns about how California is going to meet the need for the additional electricity this requires. LMUD is taking a proactive approach to this issue by securing long-term power contracts that include state-mandated renewable energy sources. Projects such as Fish Lake geothermal, Red Mesa solar, and, locally, Baseload geothermal in Wendel will help fill the gap and also ensure that we meet our state mandate for renewable energy. Our industry partners, NV Energy and Utah Association of Municipal Power Suppliers, have been instrumental in helping us meet our goals and plan for future needs. Our transmission agreement with NV Energy includes delivering energy to the Skedaddle Substation. When the substation is online, UAMPS will be our power scheduling agent. This partnership is projected to save our community millions of dollars well into the future.
Skedaddle Project Update
Speaking of the Skedaddle Substation, we are making good progress on this project. Equipment bids have been accepted and major components are ordered.
“Delivery times range from 1 to 2 and a half years, but our spot is reserved in the factory’s production line, and we expect to have the substation functional by the end of 2025,” LMUD Operations Manager Cort Cortez says.
We have also made progress on removing the Hayden Hill line, saving money along the way by using in-house labor as time allows. We have completed critical upgrades to the Shaffer Mountain distribution line that serves crucial communication facilities, essential for the well-being of our community. We relocated existing overhead lines underground, ensuring they are safe from outages caused by extreme weather.
The project came in well under budget.
“We estimated that the cost to move this line underground would be in the range of $700,000,” Cort says. “We received more than 10 sealed bids, with the lowest, $290,000, coming from ParWest based in Reno, Nevada.”
ParWest was awarded the job and finished it this spring.
Building Renovation
Many of you have asked when we will be occupying the building at 50 North Gay in Uptown Susanville. Due to the cost of renovations and upgrades, we are putting that project on hold and will revisit it during our 2024 and 2025 budget cycles.
We are committed to keeping the building and the parking lot presentable and using the parking lot for community events whenever possible. The parking lot is open to public parking, which has been beneficial for our Uptown businesses.
Wholesale Power Costs
One of the biggest challenges we faced this past year was increased wholesale power costs. LMUD does not own or operate electric generation facilities. The power we supply to our community is purchased through power purchase agreements and through the Western Area Power Administration. Beginning last December, purchased power prices began to climb and more than doubled in January 2023. With cash reserves depleted, the board made the tough choice to increase the rate we charge to our customers, resulting in a 5-cent per kilowatt-hour jump. Our current residential rate is 19 cents per kilowatt hour.
Even though that is a significant increase for our customers, we are fortunate not to pay the average California investor-owned utility residential rate, which is more than double at 35 cents per kilowatt hour. As we go into 2024, we are diligently watching power costs and how they affect our bottom line. LMUD is committed to our strategic priority of financial stability and remaining an asset to our community for generations to come.
In addition to the cost of purchased power, there are many other financial pressures on the district. State and federal mandates, such as wildfire mitigation and renewable portfolio standards, can increase the cost of doing business. We are fortunate to have organizations, including the California Municipal Utility Association and the American Public Power Association, that lobby for fair and equitable laws that put customers 1st. Their expertise in dealing with legislators and lawmakers helps give us a voice in what’s best for our community and our customers.
As we enter our 36th year serving our community, we know the future looks bright and promising despite the challenges. Stay up-to-date and informed by visiting our website, lmud.org, and following us on Facebook and LinkedIn. Thank you for allowing us to serve you—we are privileged to do so.