Re: Credibility at stake if core findings fail
To the editor:
I have followed the LCEC/City of Cape Coral franchise controversy via the Cape Coral On the Move Quarterly, the Cape Coral Breeze and the News-Press, as well as listening to folks discuss this subject at different venues. I find your editorials to be very enlightening to the citizens here who do not know the inner workings of an electric utility. I can say I do as I had 31 years in supervision and management with an electric and gas utility in Illinois that covered the majority of the state geographically and was the second largest by customer base. Based on the knowledge I gained from working in varied departments there, I can say I see no path where the City could or should attempt to municipalize the electric system serving its citizens. The title of your latest editorial is correct as is the narrative. The draft agreement the city outlined as reported in your paper has numerous items that are not feasible as well as suspect. I will address several of them:
n Street light modernization: An article from the latest Ameren Journal which I received(Ameren electric serves the majority of Missouri and Illinois) is titled “Switch to LEDs will lead to customer savings.” It reads “This was approved by the Missouri Public Service Commission. The program will launch in April and will convert two-thirds of company owned streetlights to LED technology over the next five years, potentially saving customers $1.9 million per year. Replacing older technology with LEDs is expected to save most lighting customers $1 per month per fixture. During the five year span approximately 125,000 company owned light fixtures will be replaced.” Contrast what this large utility conveys as the expected savings with what has been put out there as far as savings for Cape Coral.
n Customer service office in the city: Utilities no longer maintain open customer service offices. It is far more cost efficient to have toll free numbers. As a point of reference I was on the management team that closed all of the Illinois Power customer service offices throughout Illinois and opened the 24-hour Customer Service Center in 1990. My focus was on initiating a centralized emergency services center in conjunction with the customer service center, both of which are still operating today.
n Undergrounding: Any one who has worked for an electric utility understands the increased costs and reliability problems involved with this avenue of service. Illinois Power did not provide primary or secondary underground unless the customer(s) paid for the costs involved.
n Smart meters: I was instrumental in installing the network and metering for an automated metering system for approximately 150,00 of Illinois Power customers in the central part of the state. That method was more costly and capital intensive than the smart meter system that LCEC currently uses, which is for readings only but serves that purpose well. The utility should decide if further enhancements are cost justified.
n Cape Coral citizens subsidizing other LCEC customers: It is virtually impossible to calculate costs to serve individual customers. That is why electric companies have one rate for service for residential customers and commercial and industrial customers. There are significant reasons why this is the case.
There are numerous other reasons why the city could not provide electric service at the same or reduced rates. That would take a long discussion of why. Some of the more obvious reasons are a lowering of reliable service for some length of time as new employees learn the workings of the system from top to bottom, including among others, engineering, material buying and stocking at proper levels, load forecasting and purchases, system tie-ins, system protection device locations, employee staffing and costs, equipment investment and maintenance, etc. It is simply not realistic that the city can do this with any measure of success.
I also have experience with consultants that Illinois Power hired over the years. Consequently two major changes were put in place along with numerous other smaller ones. Those of us close to the parts of the company that were recommended for changes saw they were presented to upper management as having significant cost savings. We were sure based on our experience that that was not possible. Both major changes were reversed within a few years. I can not see a consultant with a monetary incentive providing the customer with anything less than a very positive report and wondering if that is happening now. Would the current consultant be the one to have a contract to guide the City with implementation and at what cost with what measurements of success?
As stated in the editorial, LCEC rate payers and Cape Coral taxpayers are footing the bill for the extra costs involved in these negotiations. I for one, and probably along with many others, would like to know what the cost to Cape Coral taxpayers has been to date, and what the final costs are when this matter is finalized. This would involve city employee time as well as all other companies and individuals hired for this investigation.
Finally, according to LCEC bylaw ARTICLE VIII. DISPOSITION OF PROPERTY. The Cooperative may not sell, mortgage, lease or otherwise dispose of or encumber all or any substantial portion of its property, unless such sale, mortgage, lease, or other disposition or encumbrances is authorized at a meeting of the members thereof, by the affirmative vote of not less than two-thirds of all the members of the Cooperative…. This bylaw would seem to completely block any takeover by the City, making this effort fruitless and budget monies not well spent unless we are told how this bylaw will be bypassed.
Bill Osborn
Cape Coral