Welsh authorities consider electricity tariff stabilisation programme – American Press

Local officials are considering a rate stabilization program that could save the city money on purchasing electricity during peak periods.

The goal of the program is to limit high electricity costs for participating municipalities by mitigating wholesale-side spikes during peak demand periods such as extreme cold or heat, according to Louisiana Energy and Power Authority (LEPA) General Manager Kevin Bihm.

Bihm and Deputy City Manager David Bergeron recently pitched the program to Welsh officials as a way to offset the cost of purchasing electricity through LEPA. The nonprofit agency provides wholesale electricity to 19 LEPA member municipalities that operate their own independent power systems across the state.

Mayor Karl Arceneaux said the program deserves consideration, but added that more discussions are needed before taking any action.

Bihm said the rate stabilization program would allow LEPA members to place funds in a “basket” during months when wholesale areas are low and withdraw those funds from the “basket” during months of high volatility.

The program is currently being piloted in Winnfield but could soon expand to other LEPA members. Rayne, New Rhodes and St. Martinville are considering similar programs, he said.

“What was happening is when we had these winter storms, the winter peak in the city of Winnfield was higher than its summer peak,” Bihn said. “In Louisiana, you know how hot it gets. Everybody knows its summer peak except Winnfield. When we had these storms, the voters’ bills were extremely high.”

Following discussions and the engagement of a consultant, a rate stabilization program was created to meet Winnfield’s needs based on the previous year’s budget, Bihm said.

“With our approved budget, we looked at Winnfield’s rates for the following year and that’s what our baseline is,” Bihm said. “What we do is a +5% and a -5%, so we have a 10% bandwidth. As long as our rate to them is within the bandwidth, nothing happens. We just charge them for that bandwidth.”

Bihm noted that the municipality will be charged the lower bandwidth rate if the rate falls below 10 percent bandwidth.

Any funds charged in addition to what the municipality must pay are deposited into a separate “bucket” fund to help offset future rate increases, he said.

“If you put money in the basket, it stays there in anticipation of a higher rate at some point,” Bergeron said. “The money is then applied to the rate.”

In Winnfield’s case, Bergeron said the city paid more than expected each month and ended the year with a surplus it was able to use to reduce the wholesale and retail rate when rates spiked during severe winter weather earlier this year. The surplus helped lower the rate from 6.8 cents per kilowatt-hour to 5.4 cents, he said.

For example, a bill for 2,000 kWh in 2000 would have been $194.76. With the stabilization