On August 20, 2024, the Lansing Board of Water and Light will hold a hearing on their proposed rate increases for 2024 and 2025. We are advising the Board of Commissioners to turn down the request. LBWL gives the reasons below to justify their large rate increases. We believe these reasons are insufficient. LBWL has provided almost no information about which costs have increased or how they plan to spend the money raised by the new rates. Until we see more detail and are given satisfactory rationale for the increases, we believe LBWL’s ratepayers should not be subject to these rate increases.

 

What you can do: Attend the hearing on August 20, 2024, which will be held at the REO Town Depot, 1201 S. Washington Ave, Lansing. The hearing begins at 5:30. You are not required to make any public comment during the meeting, however if you choose to speak, you may find it helpful to use some of the points below to prepare your remarks. Unfortunately, the LBWL is not accepting comments via email. If you cannot come to the meeting, you may send your written comments to Board of Water and Light, P. O. Box 13007, Lansing, Michigan 48910, Attention: Corporate Secretary. Comments must be received by 5:00pm Tuesday August 19.

 

For another way to be heard, please look here.

LBWL says: The rate hikes are necessary for development of clean energy.
Our response: The rationale for the electricity rate increase is shrouded in secrecy and shifting story lines. One of the reasons the LBWL has given for the rate increase is to pay for their “Clean Energy Plan.” This plan would cost $750 million over ten years, but a year after it was first announced, the LBWL has issued no detailed written description of the plan. Until last month, the LBWL said that a new gas-burning power plant would be part of the Clean Energy Plan even though natural gas is not clean. After questioning by City Councilmember Brian Jackson, the LBWL’s General Manager said verbally at an LBWL Board meeting that the gas plant is not clean energy and will no longer be part of the plan. But a document presented at the same meeting continued to list the plant as part of the Clean Energy Plan, and the plant’s construction is apparently proceeding. At $170 million, the plant accounted for more than 50 percent of the $300 million-plus cost of the projects planned thus far in the Clean Energy Plan. With the gas plant no longer in the plan, it is not clear why such a large rate increase is needed for a much smaller expenditure on renewable energy projects. Rather it appears that the LBWL is asking rate-payers to foot the bill for the fossil-fuel plant.

When investor-owned utilities ask the Michigan Public Services Commission (MPSC) for rate increases, there are lengthy lead times and ample opportunity for thorough investigation of the request. This does not happen with the LBWL. In addition, the MPSC staff and outside intervenors review the request. There has been no such outside review of these rate increases. The Board of Commissioners should require a report from an outside consultant about the necessity for a rate increase and if needed, how large it should be.

LBWL says: We deferred rate increases during pandemic but now need to make up for those deferrals.
Our response: We applaud LBWL for holding rates steady during the pandemic years. They should not negate the good deed they did in 2020-2022 with these new very large rate increases. Further, they have raised rates after the pandemic already, in fall 2023. They should not use previous rate deferrals as justification for rate increases that are far higher than the current inflation rate as measured by the Consumer Price Index. According to the Bureau of Labor Statistics (https://www.bls.gov/opub/ted/2024/consumer-prices-up-3-0-percent-from-june-2023-to-june-2024.htm), from June 2023 through June 2024, the CPI increased by three percent. Energy-related inflation was measured at just one percent. At the same time, BWL is asking for a seven percent increase for electricity and nine percent for water. By asking for rate increases for each of the next two years, the LBWL is locking in increases when the price of gas is falling and may go lower. Given how much we do not yet know, how can BWL justify a two-year rate schedule? Rates for 2024 and 2025 should be considered separately.

LBWL says: These look like large percentage increases but when you consider the electricity and water usage of an average customer, these are really quite small dollar amounts per month.
Our response: This statement smacks of elitism that ignores what it means to scrape by every month. Nearly 25 percent of Lansing residents live below the poverty line. Nearly 35 percent of children under 18 live in poverty. It’s already challenging for these residents to make ends meet. With these rate increases for both electricity and water, LBWL is asking them to find another $20 per month in budgets that are already stretched and strained. Access to clean, safe, and affordable water is a fundamental right, not a privilege that is extended only to those who can afford it. Combined with 5 to 6 percent annual increases from the city of Lansing in sewer rates, disadvantaged, under-employed, and unemployed residents will be forced to make risky trade-offs as they consider such key expenses as medicines, electricity, water, and food and struggle to provide for their families when their income is limited. Associated late payment penalties or shut-off fees combined with these expenses only make the problem worse. At the very least, BWL should implement a no-shutoff policy for water, especially given the scale of these increases.

BWL says: We participate in Community Resource Fairs at which their customers can get help to catch up on past due bills.
Our response: BWL’s participation in the resource fairs is a good thing. But this is not the same as making rates affordable. By the time that someone has fallen behind it is often already too late. It would be far better to devise rate schedules that are affordable for everyone rather than putting band-aids on wounds after they have happened.