LCUB to lower rates

Lenoir 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 30.

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,” Littleton said.

“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 $1,284,235.

“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 said.

“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 this.

“I think it’s big news,” he added.