October 24, 2013

More revenues, purchased power for LMU

Utility's purchased power dependent on contract renegotiation.

by Mitchell Kirk Pharos-Tribune

---- — Logansport Municipal Utilities is preparing for more revenues and more expenses for purchased power in its electric budget for 2014.

Revenues for next year are budgeted at $1,224,130 more than in 2013. Notes accompanying the budget state this is because LMU accrued $965,454 more in revenues in 2013 than in 2012 and $1,205,769 more than the 2013 budget projection.

The notes go on to state demand charges from Duke Energy, which supplies about 70 percent of the power LMU distributes, will increase starting in January from $16.91 per kilowatt to $17.99 per kilowatt, also leading to the projected increase in revenues.

Power LMU purchases from Duke Energy is budgeted to be $2,017,380 more in 2014 than the amount budgeted for this year because of demand cost increases and projected increases in kilowatt-hours purchased, the budget states.

Purchasing more kilowatt-hours from Duke Energy will rely on LMU’s successful renegotiation of its coal contract with Peabody Energy. LMU Superintendent Paul Hartman is looking to decrease the Logansport generating plant’s output and bring the current agreement with Peabody Energy from 80,000 tons of coal down to 20,000 tons for the remaining two years on the contract. After Duke Energy finishes upgrades on its lines, it will be able to supply Logansport with power cheaper than it would be for LMU to create its own at its generating plant.

Even without a renegotiated coal contract, LMU made $1,502,611 more in purchased power expenses this year than it did it 2012 and $703,864 more than what was budgeted for this year, figures in the budget reflect.

A decrease in engineering employees and projected engineering fees led to $75,000 less being budgeted for employee benefits in 2014 than what was for 2013.

Notes accompanying the budget state the $284,875 increase in administrative expenses budgeted for next year will result from City Building repairs and expected increases in insurance and employee benefits.

Ultimately, the budget allows for $572,000 for capital expenditures, which is split evenly between four categories.

The replacement of a brush chipper, bucket truck and two pickup trucks totals at $484,000. For an underground residential distributor locator, $5,000 is set aside. A three-phase tester to enable the testing of meters for large accounts on-site and allow for immediate feedback and increase the total number of meters tested will cost $30,000. Replacing the 1994 radio system in LMU trucks and handheld units will cost $53,000.

Mitchell Kirk is a staff reporter at the Pharos-Tribune. He can be reached at 574-732-5130 or Follow him: @PharosMAK

LMU 2014 Electric budget Projected revenues $1,224,130 more than 2013 Projected power purchase expenses $2,017,380 more than 2013 employee benefits/development and inspection $75,000 less than 2013 Administrative expenses $284,875 more than 2013 Source: Logansport Municipal Utilities