Lansing BWL explains why it's raising rates

Posted at 8:46 AM, Oct 28, 2016
and last updated 2016-10-28 08:46:37-04

The Lansing Board of Water and Light is going through some major changes.

In four years, it is closing the Eckert Power Plant and opening a new one, and General Manager Dick Peffley says those changes cost money.

"Right now, we have to replace the energy and capacity that will be lost when Eckert Power Plant closes, it's a paid-for facility, we have no mortgage payment," Peffley said. "When we build a new one, we're going to have to bond for it and recoup that money somehow." Some of the money will come from a rate increase. The BWL does not know yet how much that increase will be.

"After about the first of the year we'll know how much this plant will cost, we'll divide it out over a 20-year time frame and figure out how it's going to affect our residents," Peffley said. The cost of the plant depends on how much energy it will have to generate. The Board is trying to get more of its energy from renewable sources.

"We're looking at 30 percent clean energy by 2020, that's very aggressive, and we will make that," the general manager said. The utility says it wants to give customers information on exactly how their rates will change years in advance.

City Council President Judi Brown Clarke, who presided over a joint meeting between the Council and the BWL's Board of Commissioners Thursday night, says she was pleased with the Board's presentation. "The rate increase] is going to be thoughtful, so it's a multi-year, so whatever the actual increase is going to be, it's something that's gradual," Clarke said.

"We think that's fair to our customers, it does put a little burden on us to live within our means, but I think we've shown over the last two years that we can do that," Peffley said.

He says the BWL should know how much the new plant will cost, and how much rates will have to increase, in three to six months.