Aug. 21, 2009

The LES Administrative Board held its regular monthly meeting Aug. 21 at the Lincoln Electric Building. Items from the meeting, as well as other pertinent information, include the following:

Cooler July weather, lower revenues mean lower expenses

Calling July “an extraordinary month” for low temperatures, LES Chief Operating Officer Doug Bantam told the Administrative Board that smaller revenues were accompanied with below-budget expenses due to lower demand for energy.

The result, said Chief Financial Officer Keith Brown, was year-to-date net revenue that stood at $9.9 million compared to a projected amount of $5.4 million.

Earlier this month, Nebraska Public Power District said it is considering a 6.5 percent rate increase and cited July’s low temperatures among other factors driving the need for an increase.

LES’ statistics for July:

• Customers used 12 percent less energy in July than was budgeted.

• Revenue was 15 percent lower than budget.

• Net revenue for the month was 19 percent less than budget.

• July expenses also were down 14.3 percent.

• LES generating resources performed very well during July.

For the year-to-date:

• Energy was down 3 percent.

• Revenue was 4 percent lower than projected.

• Expenses were 7.1 percent below budget.

• Wholesale revenue was up 10 percent.

• Net revenue was up 83 percent.

Adding to the situation, natural gas prices were significantly below budget, and because customer demand was so low, LES’ local units that burn natural gas operated very little in July. In addition, purchase prices on the wholesale market were half the amount expected last month.

Board updated on search for LES administrator & CEO

Dawn Rockey, LES Administrative Board chair, announced that requests for proposals (RFP) from search firms are due Aug. 31.

The Board’s Personnel and Organization Committee will review the RFPs and make a recommendation for the full Board to consider. No timeline has been set for this step in the process, she said.

LES submits grant for Smart Grid, holds educational forum

This month, Lincoln Electric System (LES) pursued funding for and held an educational forum to educate customers about the Smart Grid.

An application was submitted Aug. 6 for a grant to build Smart Grid infrastructure over three years. LES applied for advanced metering infrastructure (AMI) to the Department of Energy’s Smart Grid Investment Grant Program, which is part of the American Recovery and Reinvestment Act of 2009, commonly referred to as stimulus funds.

LES has been working on a Smart Grid plan requiring about $67 million in infrastructure improvements, particularly in the area of AMI, said Vice President of Consumer Services J. Todd Hall. The application seeks funds covering up to $33.5 million, or 50 percent of the cost.

Before any work could be started, it would be necessary for the project to be included in the LES Capital Improvement Program (CIP) that is submitted to the City as part of its budget and be approved by the LES Administrative Board and City Council, Hall said.

The infrastructure changes would give customers two-way communications to enhance operating efficiency, increase service reliability and provide customers an interactive means to manage their consumption, he said.
Smart meters would allow customers to view their electric usage and rates and change their use of electric energy through two-way communication with household appliances, equipment and electronics, he said.

In addition, equipment would collect, sort and manage data from networked meters and distribution equipment, Hall said. Two-way communication also would enable other interface capabilities such as net metering for on-site generation and pilot programs to charge electric vehicles.

To help prepare customers for the Smart Grid, LES sponsored the Smart Grid Educational Forum Aug. 13, which attracted nearly 170 customer/owners.

Two of the country’s most innovative leaders in Smart Grid technology, Andres Carvallo, chief information officer of Austin Energy (Austin, Texas), and Robert Mack, deputy director of public affairs for Tacoma Public Utilities (Tacoma, Wash.), were featured at the forum, Hall said. Other national and international energy experts spoke about their experiences implementing Smart Grid technology.

This month, Austin Energy will complete its Smart Grid plans for complete coverage of its service territory, which includes approximately 1 million consumers. Tacoma’s Gateway project has installed automated meters in about 10 percent of its residential customers’ homes.

Other speakers and their topics were as follows:

• “What Is the Smart Grid?” by Kiah Harris of Burns & McDonnell, a planning, design and construction firm that serves the electric industry.

• “What Are the Benefits? Why Are We Doing This?” by Henry Bailey, utility principal of SAP, North America, the world’s largest business software company.

• “Smart Grid National Perspective” by Christine Richards, editor-in-chief of Intelligent Utility magazine.

• “Connecting the Customer and the Utility” by Mark Bruss, area vice president with Itron, St. Louis, Mo., a leading technology provider to the global energy and water industries.

• “Smart Appliances, Homes and Cars” by Chris Stough, president of EcoTech Energy Solutions, and Jerry Meyer, fleet account executive of General Motors.

Between presentations, interactive displays were available to learn more about various applications of Smart Grid technology and the organizations supporting Smart Grid.

Other Reports