Lake Worth 2012 Residential Electric Rates - The Shell Game

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By: Guest Blogger, Expert in Electric Utilities

"The proposed FY 2012 Residential Electric Rates have been restructured and tiered based on total energy consumption. For customers using less than 500 kWh hours per month, the rate of electrify will be reduced from 12.76 per kW hours to 11.30 per kWh hour. Residents using electricity exceeding 500 kW hours, but less than 1,000 kW hours will only pay 13.30 cents per kW hour. Customers exceeding 1,000 kW hours will pay 15.30 cents per kW hours reflective of the cost of service for this high consumption. All resident customers, irrespective of consumption, will pay a minimum monthly cost of service charge of $34.50. The big Scam!

As seen in Chart 3, residential customers using less than 500 kW hours per month because of good energy conservation will see a reduction in their electric rate of 5% while those residential customers using in access of 2,500 kW hours per month will see an increase in the power bill of 1% per month. The FY 2012 Residential rates are consistent with the City Commission‘s desire to reduce the cost of power as well as promote conservation."

Now, because I have absolutely no idea if the CM wrote this paragraph, or even fully comprehends what the paragraph means, I will break it down into terms that even someone who may be a little less educated or even intellectually dishonest (can we all say CM?) can understand. You see, Ms. CM, parsing words does not work when you have an informed electorate.

The CM states that residents using less than 500 kwhr/month will see a rate reduction from $0.1276/kwhr to $0.1130 kwhr or 11.4%. Residents with a usage greater than 500 kwhr/month but less than 1,000 kwhr/month will see a rate increase from $0.1276 to $0.1330 per kwhr (4.2%) and those residential customers with a usage greater than 1,000 kwhr/month will see a rate increase from $0.1496/kwhr to $0.1530/kwhr, or 2.2%. There is currently a $8.90 service charge connected to each bill (pg. 70 of new budget). But, the catcher here is that the "Cost of Service Charge" for each and every residential meter will be increased to $34.50/month from its current $8.90 or a 387% increase. Now lets break this down further to see exactly what it means for the poor and elderly customer.

The poorer customer nearly always lives in the smaller home, can afford few amenities and will restrict the use of electricity to a far greater extent than the well-to-do. So we will begin with the poorest amongst us and work our way up the sociological food chain.

Step 1:

In 2011 the customer using less than 500 kwhr would pay a base rate of (499 kwhr * .1276 + 8.9) = $72.57 for their electricity.
In 2012 this same customer would pay (499 kwhr * .1130 + 34.50) = $90.89 or a 25% increase.

Step 2:
In 2011 the customer using between 500 kwhr and 1,000 kwhr/month would pay a base rate of (999 * .1276 + 8.9) = $136.37 for their electricity.
In 2012 this same customer would pay (999 * .1330 + 34.50) = $167.37 or a 23% increase.

Step 3:

In 2011 the customer using greater than 1,000 kwhr/month would pay a base rate of (1,000 & .1496 + 8.9) = $158.50 for their electricity.
In 2012 this same customer would pay (1,000 * .1530 + 34.50) = $187.50 or a 18% increase.

You see, the CM has used an old carnival trick (can we all say shell game?) to tell the townfolks that they would be receiving a rate decrease, and how the City would be soaking the rich, when in fact, it is the poor and the elderly that will be required to shoulder an even heavier burden than before.

Now while the CM may wish to say that she is not screwing the poorer amongst us, her policies tell a different story. And this is but one small example in a budget replete with assessments, and each will place a significantly heavier burden on the poor than the wealthy. And it does not require a Helen Keller to be able to see a difference in an 18% increase and the 25% increase, nor does it require an Einstein to run the numbers.


Note by Lynn's Little Bit of Trivia: When I queried the $34.50 charge at a city commission meeting, I was told it was only a minimum...it was for all of those who turned off their electricity when gone for the Season, as an example, because it still cost the city money to service that meter. In fact, the CM said it cost more like $42. Commissioner Maxwell stated that too. It continues to state in this Budget that we all will have a minimum monthly cost of service of $34.50 irrespective of consumption. The Commission has not eliminated this from the CM's budget.

The above writer explains this further after being interrogated/questioned by me--That chart (page 70) is no longer valid. All of the numbers changed when Mark Beauchamp conducted the current rate analysis. There isn't even a number in there for <500 kwhr.

I am giving the CM the benefit of the doubt by saying that the "Cost of service" is going from $8.90 to $34.50 as there is nothing in the document that specifies that the $9.90 charge will be taken out and substituted for the $34.50. If it is not, then the new "Cost of Service" charge will be $34.50 + $9.90 = $44.40.

The CM had said in her budget document that every meter would be charged the $34.50 regardless of whether they used power or not. She even made the comment that seasonal residents would be charged that regardless of whether they lived in LW.

If the $9.90 is retained, then the $44.40 charge is kicking the poor in the balls even harder.