Chamber scrutiny, citizens helped reduce natural gas rate hike
In April, the city approved an increase in natural gas prices. The backstory is a small example of how community participation should work.
The city is strongly committed to sustainable development. Natural gas is a declining energy source. The city council has made it clear that it will step back from this matter over time.
Las Cruces Utilities had spent years trying to grow its business, serving more customers. Expansion was a major goal. Changing direction in a life’s work can be difficult.
The original rate hike proposal would have raised small business monthly gas bills by 75% to pay for largely questionable expenses. These included building new gas lines which would violate the city’s environmental policy and were obviously a bad business idea.
LCU is expanding into Talavera, where evidence indicates few residents will tune in. (Why would they, knowing that natural gas is on the verge of extinction?) Additionally, many of the parcels the LCU relies on are vacant. They could sit vacant or builders could avoid natural gas. (See my August 29, 2021 column.) LCU wanted to expand the lines to other outlying areas. Using more natural gas would release more greenhouse gases. The extensions would also create annualized debt service that would cost existing customers, often people without a lot of money, an additional $935,000 a year for 20 years. Over time, as more prosperous builders and homeowners choose renewable energy sources, the imbalance will worsen.
The increase would have come on top of a large surcharge for winter storm Uri, just as pandemic and pandemic precautions had weakened small businesses.
The Las Cruces Green Chamber of Commerce hired consultant Phil Simpson, who reported much of this and articulated it at LCU board meetings. Simpson, the Green Chamber, the Las Cruces Chamber of Commerce, and a few citizens vigorously opposed the plan. The Utilities Board meetings were a cultural collision, with gas utility folks faced with the inevitability of cutting, rather than expanding, service.
LCU wanted to go ahead, but quickly agreed to drop the line extension and costly debt service increase, reducing the total by about a third. The green chamber pressure also got a delay, so the increase would start after the winter storm was over. It would be much less disruptive for small businesses. Additionally, Simpson successfully argued that if rates were to jump, it should be done more gradually. This will be done in three phases, over three years. Ultimately, the proposed rate increase went from a total of $2.4 million to $1.5 million. The increases of 9.2% (residential) and 42.76% (small business) rose to 3.76% and 33% respectively.
Eventually, LCU gave the city council a much more reasonable proposal, backed by more realistic numbers. As one observer put it, “LCU really upped their game once there was some real scrutiny.” (“Real scrutiny” was an automatic part of the process, as part of consumer oversight procedures the city scrapped in 2016.)
We’re lucky the Green Room involved Simpson to crunch the numbers and show that LCU’s plans were economically unwise and harmful to the environment. They have saved many of you money and helped align LCU with the commitment expressed by the Mayor and City Council. The people who opposed the increase are determined that the city’s energy transition plan and roadmap will be robust enough to move us meaningfully towards decarbonization, and not just be greenwashing.
Now if only we could get the LCPD to follow the Public Records Act regarding police shootings against civilians. It makes no sense to make these tragedies worse.
Las Cruces resident Peter Goodman writes, takes pictures and occasionally practices law. His blog on http://soledadcanyon.blogspot.com/ contains additional information about this column.
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