Power Projects and Preparedness
Every day we wake up to reports of higher costs for necessities. The same is true for the costs of operations here at Lassen Municipal Utility District (LMUD). We have experienced inflation and are managing by seeking as many alternative bids and options as possible.
LMUD is a full-service customer of Western Area Power Administration (WAPA). WAPA provides LMUD and our customers power from several federal power projects. These costs have traditionally been stable. Last year, power costs during the peak hours of 4 to 8 p.m. increased due to loss of transmission lines caused by the Dixie fire and the Bootleg fire in Oregon. The same was true this summer. The California Independent System Operator declared power emergencies and called for statewide conservation efforts.
Even with all those challenges, WAPA and LMUD have done a good job controlling purchase power costs. In fact, LMUD’s residential rate, 14 cents per kilowatt hour, is the same today as it was in 2008—a great accomplishment in today’s economy. The LMUD board and staff are committed to controlling future costs to the greatest extent possible.
We continue to be on track with the construction of our Skedaddle Substation and NV Energy interconnection projects. Early indications of pricing for major electrical equipment are favorable. Costs of large, high-voltage circuit breakers are within earlier estimates as indicated by bids received in October. The next stage of major electrical equipment is the high-voltage transformers. These have gone out for bid. Responses from large equipment manufacturers are due in late October.
Other costs and project components include grading, foundations, steel, a 4-mile interconnection line and electrical protective equipment for the substation.
We are taking every measure to control costs in this inflationary environment. The district obtained bond financing for the project in October 2021 at historically low interest rates that benefit customers in the long term. Power procurement costs are also expected to be more controllable when we are connected to the NV Energy system rather than the PG&E transmission system. This connection will open a larger power market for us, providing options that currently are not available from WAPA.
As this year nears an end and the next quickly approaches, know that LMUD is focused on controlling the cost of our large projects. While we cannot control inflation rates nor can we control the cost associated with PG&E or WAPA, we can procure equipment and construction services with a focus on controlling costs, and apply our team’s knowledge and experience in electrical transmission and distribution.
In closing, a quick reminder that winter is on its way, bringing the possibility of power outages. With electricity powering every aspect of our lives and its increasing importance for maintaining communications, lighting, heating and cooling, and health and safety, we know our customers place great value on the reliable service we provide. We take every outage seriously and our crews work diligently to get customers back in power, whether the outage affects one customer or 1,000. I encourage you to read the article on pages 4 and 5 regarding outage preparedness. No one likes outages, but the inconvenience they cause can be lessened by being prepared.
Pat Holley
General Manager