Liberty Utilities looks to recoup losses from 2017 winter storms at Lake Tahoe
June 29, 2018
Lake Tahoe utility company Liberty Utilities informed customers last April of a proposed 5.27 percent electric rate increase due to the under collection of more than $9 million in 2017.
The increase in rates stems from, according to Liberty Utilities, severe storms in January and February of 2017, which caused widespread outages and damage to the company's equipment.
Liberty, which serves the California side of the lake, submitted an Advice Letter to the California Public Utilities Commission on March 14 for approval to increase rates. The company, according to Kathy Carter, of Liberty's consulting firm Trisage Consulting, is still awaiting a response from the commission.
To minimize impact on customers, according to Liberty's customer notice, the company is requesting the recovery timeline to take place over a 24-month period.
As a regulated utility, Liberty Utilities' rates must be approved by the California Public Utilities Commission, according to the commission, and reflect cost to provide customer care, emergency and outage services, maintenance and improvement of infrastructure, and recovery of operating costs to serve customers safely and reliably. Costs are a direct pass-through to the customer based on a California Public Utilities Commission approved return on investment.
In accordance with the Public Utilities Code, a regulated utility has the opportunity to recover reasonable costs to address a catastrophic event.
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Liberty Utilities said the winter storms of 2017 meet this standard as the events caused widespread outages in the area, required the company to supplement its work crews, and forced Liberty to procure new maintenance and capital equipment. The company also asserted it undertook catastrophic-event work in counties the governor declared a state of emergency.
While Liberty Utilities awaits approval from the California Public Utilities Commission, customers in the Tahoe area saw a 4.5 percent decrease in their rates starting on May 1, according to Liberty's customer notice, due to a decrease in fuel costs.
Because of the Energy Cost Adjustment Clause, the California Public Utilities Commission requires investor-owned utilities companies, like Liberty, to make annual adjustments to energy costs, passing the costs to customers dollar-for-dollar.
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