LCUB to lower rates
City Utilities Board has announced a rate reduction for all classes
of its electrical customers, as well as expected continued
reductions for the next five years.
“LCUB, through our long-range planning, elected to pay off $15.5
million of remaining electrical debt, which had roughly a 5 percent
interest rate over the next 10 years. The interest we’ll be saving
over the next 10 years is roughly $3.7 million,” LCUB general
manager Shannon Littleton said.
The rate reduction comes in part as a result of paying off that debt
and no longer having the interest payment burdens. LCUB’s Board
approved the rate reduction at a special-called meeting Monday, July
About 60,000 LCUB electrical customers will see a combined $256,847
savings this year.
“That may not be a significant amount in year one for a utility
bill, among 60,000 people. But that’s an initial step for us,”
“It’s not going to be much. It will not be very noticeable on a
monthly bill, but yearly it may be noticeable. What I’m hoping will
happen is that over a couple of years we’ll be able to accomplish a
noticeable difference on a utility bill,” he added.Littleton said he
hopes the rate reduction will remain in place each of the next five
years, resulting in a total savings to customers over that time of
“LCUB more than likely will not have a rate increase over the next
five years. Now, TVA may have increases along the way, but LCUB will
not,” Littleton said.
Aside from debt repayment, Littleton said the rate reduction also is
due to internal efficiency changes, voltage regulations and controls
and the Utility’s recent switch to time-of-use billing and its new
wholesale rate from TVA.
“It all starts adding up over time,” Littleton said.
The $15.5 million debt repayment is a big step for LCUB’s electrical
department, which historically has had budgetary issues. The
department now is operating debt-free.
“I can think back several years ago when we were in a dilemma, when
we were maybe going to exceed our debt restrictions per our charter.
... And LCUB decided to, among other things, to go along with rate
increases from TVA and do other things that helped us,” Littleton
“But I think more than anything, we pulled up the bootstraps
internally. The employees have not had a raise, and have actually
had a decrease in benefits the last two years. A lot has went into
“I think it’s big news,” he added.