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LCEC says it won’t raise electric rates this year

By Staff | Jun 10, 2009

The Lee County Electric Co-operative, which provides electrical service to various communities, including Sanibel and Captiva, said on Tuesday that raising rates in 2009 “is not an option.”

During difficult economic times, it is more important than ever for businesses to keep a close eye on the bottom line, LCEC officials said. Last year, LCEC began to see sales and revenues fall well below budget due to a decline in both customer count and electricity consumption. Increasing material, labor and equipment costs also had an impact.

In 2009, the trend is continuing and LCEC sales and revenues are well below already reduced budget projections.

Despite these challenges, LCEC does not see raising base rates for electricity as a viable option in 2009. The company is working hard to mitigate the shortfall in revenues and ensure base rates remain stable. Recent adjustments geared toward keeping customer base rates low include the following:

A rigorous budgeting process focused on controlling spending and further reductions were quickly implemented to address the evolving economic environment.

Budgeted capital expenditures were held at levels comparable with LCEC spending in 2004.

During the first quarter of 2009, more than $2 million was trimmed from the expense budget. Monthly reviews of every line item help to eliminate or defer additional expenditures without impacting customer service or reliability.

As a rule, vacant employee positions have not been filled. Current employees have worked hard to ensure productivity does not falter by taking on additional responsibilities and cross-train where possible.

Nearly 10 percent of LCEC management positions were eliminated.

Management and non-union employees were not awarded pay increases despite solid performance. Additionally, all non-critical training and business travel was eliminated along with the annual company picnic and holiday event.

Adjustments to employee schedules helped to reduce labor costs further. Staggered shifts and work schedule adjustments ensure that resources are available when needed while reducing the cost of overtime or standby pay.

The contract workforce used to supplement LCEC employees has been reduced by 30 percent in 2009, continuing the 2008 trend.

LCEC is working hard to control costs so that electricity prices remain among the lowest in the state. Because approximately 70 percent of an LCEC bill is related to power supply costs, which LCEC does not directly control, it is critical that LCEC focuses on those costs that they can more directly manage, officials said.

While economic uncertainty continues, the immediate and ongoing cost saving steps position LCEC to both preserve its financial strength and ensure that customers continue to receive reliable electric service at reasonable prices. Working hard to keep rates low while providing reliable electricity and quality service has been the business philosophy that has been the foundation of LCEC since it was established in 1940, officials added.

Established in 1940, Lee County Electric Cooperative, Inc. (LCEC) is a not-for-profit electric distribution cooperative serving Sanibel and Captiva Islands, Cape Coral, North Fort Myers, Marco Island, Pine Island, Everglades City, Immokalee, Ave Maria and parts of Lehigh Acres.

Source: LCEC