LED Rate Increase To Take Effect June 5

LYNDON — Lyndonville Electric Department will impose its first rate hike in 13 years next month.

General Manager Jon Elwell told Village Trustees on Monday the 12.44 percent increase will take effect June 5.

Under the proposed increase, the monthly bill for the average household using 600 kilowatt hours would go up by approximately $11.61.

It will be reflected in July electric bills.

LED submitted the rate hike for Public Utilities Commission approval last month with unanimous Village Trustees support.

By law, LED can impose the rate hike while the application is pending, and Elwell explained it was necessary to do so because "we're running a pretty significant deficit."

"I was holding out hope that maybe we could delay it a little bit longer, but after looking at [the most recent financial reports] it just doesn't look like we're going to be able to fend it off," Elwell said.

If the Public Utilities Commission approves a lesser markup, LED would refund the difference to its 5,927 customers across 11 towns.

The timeline for the PUC process is undetermined.

LED customers can provide feedback during the Public Utility Commission's rate review process at https://puc.vermont.gov/

The rate increase is intended to offset a projected $1 million shortfall in 2023.

The shortfall can be attributed to three primary cost drivers:

Green Power: LED spends considerably more to comply with the state's Renewable Energy Standard.

LED switched 43 percent of its portfolio from low-cost nuclear to higher-cost wind and hydro — at nearly double the price per megawatt hour.

The choice was made under pressure. The Renewable Energy Standard law requires utilities to have 75 percent non-nuclear renewable power by 2032. That target will likely be raised to 100 percent at some point. LED is at around 60 percent.

Gas Prices: Last year, due to the rising cost of purchasing power from natural gas plants, LED exceeded its power purchase budget.

Natural gas accounts for 57 percent of New England's energy, and fluctuations can have dramatic regional impacts.

While natural gas prices have come down since last year's spike, prices could remain erratic going forward due to the ongoing war in Ukraine.

Inflation: Under its antiquated rate, LED cannot cover costs for operations, maintenance, salary, and benefits.

To maintain cash flow in the face of higher expenses, mounting debt, and rising power costs, LED took out a $300,000 loan last year that it is still paying back.

LED would be one of the last utilities locally to raise its rates in response to market changes.

Others have announced double-digit rate hikes in recent months in response to inflation and higher renewable energy rates.

In recent months PUC approved rate hikes for Barton Village Electric (18.27 percent increase), Hardwick Electric (13.03 percent), and Morrisville Water and Light (11.25 percent).

Stowe Electric, Burlington Electric, Washington Electric Co-op, and Vermont Electric Co-op also requested rate hikes.

Across the border, in the past year, the New Hampshire Electric Cooperative and Unitil raised rates 77 percent, Eversource and Liberty doubled their rates, and Littleton (N.H.) Water and Light increased rates by approximately 37 percent (effective on Nov. 1).