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March 14, 2007
Editorial
Caliente Should Hang On To Electric
There is a move afoot to force Caliente to divest itself of its electric utility.
Depending on your philosophy, there are plenty of arguments on either side.
First, particularly in the 21st century, governments should go to great lengths to ensure that they aren’t in business against private enterprise.
There are plenty of for-profit electric companies out there.
However, they aren’t lining up to provide power to 400 meters in Caliente.
While the Lincoln County Power District may seem like an attractive alternative, the truth is that they aren’t really a private enterprise.
They are simply another quasi-governmental non-profit agency.
And if you’re going to have to deal with a governmental agency anyway, you might as well stick with the one that’s closest to your voting control, which would definitely be the Caliente city council.
So the idea of selling out to LCPD doesn’t satisfy that philosophy.
But maybe it’s a financial philosophy which would lead some to consider getting rid of Caliente’s electric utility.
That’s actually a pretty reasonable thought.
It’s tough to swallow the notion that people in Caliente are paying nearly double the per-kilowatt-hour rate being paid by others in the county.
But that’s not quite accurate.
Other customers of LCPD are paying additional fees that have nothing to do with that rate.
Obviously they are paying less than Caliente residents, but it’s not as large a gap as it seems.
Also, as was expressed during Monday’s LCPD board meeting, that low rate for the county wouldn’t stay low for very long if they took over Caliente.
Because of the $645,000 bonds still owed, LCPD board members noted that electric rates would probably have to go up all over the county to meet that added expense.
Also, there would be a need for significant upgrades in equipment to bring Caliente into the LCPD fold, which would add to the cost of power as well.
Because of their bulk buying capability and other cost savings because of their size, the Lincoln County Power District might be able to do some things cheaper, but probably not enough to make the move worthwhile for Caliente rate payers.
But here’s the real answer.
If you went to your nearest auto parts store and started buying all the parts necessary to build a 2007 Cadillac, it would wind up costing you at least twice as much as it would cost to buy a new 2007 Cadillac.
There are advantages to paying for the whole package instead of trying to piecemeal it together.
This is one of those times.
While the Caliente electric rates are high, they help offset other expenses city residents might otherwise incur.
For example, Caliente has a number of street lights.
If they didn’t own the electric company, they would have to pay someone else for the power necessary to keep those lights on.
Same thing goes for lights at the parks and pool and baseball fields and dozens of other municipal activities which require electricity.
So if you got a cheaper rate by selling the facility to LCPD, the savings would be eaten up in higher city taxes to pay the electric bill for those things.
In other words, by combining your electric, water, sewage, and tax bills altogether with one entity, the net is probably a pretty good deal compared with dividing each service into a separate company, and a separate charge.
Besides the truth is that, if you’re unhappy with your electric bill in Caliente, you have control.
You have the chance every two years to fire the board members, your city council members, if they don’t get the rate down to a level you like.
If you don’t like your rate with LCPD, your voting voice is only one fifth of the total required to change the makeup of the board.
There is no question the electric rate in Caliente is too high.
But the answer isn’t to throw out the baby with the bathwater in hopes that someone else can do it cheaper.
Especially when the baby comes with $645,000 worth of debt.
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