City set to sell cheaper power

LANCASTER – City Council members likely will approve suggested rates Tuesday night for power being sold by the municipality, and that cost would undercut Southern California Edison’s standard fees by 3%.

Rates were developed to generate enough revenue to cover annual expenses, fund a 10% operating reserve and financial stability reserve, and at the same time save customers a minimum of 3% per kilowatt hour compared to an Edison, stated a report from Barbara Boswell, the city finance director.

City administrators will use money from the General Fund to pay the initial startup costs, according to Boswell. However, she stated, that money “can be repaid within three years of operation.”

Lancaster Energy, the power provider, will start serving the customers who have municipal accounts in May. Then, in October, service will be available for all other customers, the report stated.

The rate setting was a core element of the power program.

In addition to bringing in sufficient revenue for operating expenses of the Lancaster Energy program, city officials also took into account the funds needed to maintain reserves.

Aside from meeting those revenue requirements, Lancaster Energy aims to provide customers with stable rates by “reviewing and adjusting” those charges each year, and adopting a cost structure which beats the current Edison per-kilowatt hourly fee, Boswell’s report stated.

Lancaster Energy will offer consumers two electricity products – Clear Choice, a 35% renewable energy product, and Smart Choice, a 100% renewable energy product.
People who sign up will automatically be placed in the Clear Choice program, but they will have an opportunity to “Opt Up” to the Smart Choice program.

The 3% rate reduction does not apply to residential customers enrolled in Edison’s California Alternate Rates for Energy program, commonly called the CARE program.

Customers in the CARE program will save 15% compared to their current Edison rates.
Lancaster residents who qualify and participate in the Edison CARE program will not be subject to fees imposed by Edison to customers that switch from Edison to Lancaster Energy.
Customers who select the Smart Choice will pay a 1.5% per-kilowatt hour premium “to cover the additional cost of the product,” Boswell’s report stated.

Lancaster Energy customers who possess electricity-generating facilities, for instance roof-top solar panels, will be able to opt for the power supplier’s Personal Choice Product.
Based on that option, customers whose facilities generate more energy than they use will receive a credit of six cents per kilowatt hour on their bill.

Customers who have a credit greater than $100 as of October each year will receive a check in the amount of that credit.

Anyone with a credit less than $100 will see the money roll into the next billing cycle, according to the report.