The Dixie Wildfire that began in July has impacted so many of our customers, neighbors, friends, and employees. It has been a difficult couple of months with many people having been displaced from their homes. Others endured repeated evacuation warnings and evacuation orders, and many have had friends or family members who lost homes or property.
The impact of the fire affects us all personally, as well as Lassen Municipal Utility District’s (LMUD's) operations and transmission lines. We suffered damage along several miles of our transmission line between Westwood and Susanville. Additionally, PG&E suffered damage to its transmission line that supplies power to LMUD at the Westwood Substation.
As I write this, the PG&E Caribou line remains out of service, which means the only power supply available to LMUD is the Honey Lake Power Biomass Plant. HL Power is a longtime reliable partner in supplying power during emergencies. However, it does come at a higher-than-average cost.
The Dixie Wildfire underscores the vulnerability of our power supply. LMUD’s ongoing effort to obtain a more reliable interconnection with NV Energy to the east—known as the Skedaddle/NV Energy Intertie Project—is more important than ever. At the July 27 board meeting, the LMUD board approved moving forward with financing the engineering and construction of this project. The new schedule for completion is November 2024. This project will increase reliability of power supply, and will come with additional financing and transmission service costs.
LMUD lines damaged by fire between Westwood and Susanville were restored in about four days. This is a credit to the hard work and good planning of our employees. LMUD’s ability to perform work this quickly is a benefit of being a publicly owned utility.
How public power operates and serves our territory allows LMUD to respond quickly to emergency conditions and take actions to restore power as quickly as possible. Other benefits of public power include its not-for-profit structure. Our primary financial objective is to collect only the revenue needed to operate and maintain the LMUD system and modest reserves.
At LMUD, we work for and provide service to our ratepayers. We are governed by a five-member elected board of directors. We answer directly to you, our customer/owners. That is unlike investor-owned utilities, which are beholden to shareholders whose bottom line is profit.
To help pay for additional emergency power supply to our customers, the LMUD Board of Directors voted to increase rates a half cent across all rate classes at the August 24 board meeting. This increase took effect with the September 10, 2021, billing and bring the residential rate to 14 cents per kilowatt-hour.
Each quarter, the LMUD board reviews the district’s Power Delivery Cost Analysis. The PDCA summarizes revenue and expenses to help the board determine the need for either a rate increase or decrease. Current LMUD rates are not adequate to cover our energy costs. The cost of purchased power has increased nearly 50%. This is due to a significant shortfall in hydropower and increased costs during wildfire islanding events with Honey Lake Power.
Historically, the power we buy from the Western Area Power Administration has been relatively low-cost. However, due to drought conditions that affect the supply of hydroelectric power, affordable hydropower has been replaced with more costly resources.
Instituting a rate increase is never easy. We understand the effect it has on our customers and our community. However, this increase—and others that may follow—are vital to LMUD’s operation and our mission to provide safe and reliable power to our community.
By the time this message reaches you, the board will have held a public hearing September 28, where they planned to discuss increasing the facility charge. I will update you on the results of the hearing in my next manager’s message. The September 28 hearing was set to address increasing costs and funding for planned reliability projects, such as the Skedaddle Substation/NV Energy intertie.
Customers are welcome to attend all board meetings. Regular board meetings are the fourth Tuesday of each month. Agendas and minutes may be viewed online at www.lmud.org.
As we went to press, the Caribou Transmission line came back into service. LMUD’s system returned to our normal power feed on September 17, 2021.