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NEWS ADVISORY

Feb. 23, 2009
Contact: Jeff Hood, communications specialist, (209) 333-6801

Lodi ratepayers to see reduction in Energy Cost Adjustment

Energy prices will decline over the next several months for Lodi Electric Utility customers, with the utility forecasting an energy-cost credit on bills in June.

The utility last week agreed to purchase 21 million kilowatt-hours of energy for the months of March through August at an average price of 3.9 cents per kWh. The purchase, from four power firms, represents about 5 percent of the utility's annual energy sales, and a portion of the City's energy needs for those six months.

The Energy Cost Adjustment, a revenue-neutral mechanism that allows the Lodi Electric Utility to collect the actual cost of power from customers, is forecasted at 1.9 cents per kWh in March, 0.7 cents in April, 0.2 cents in May and a credit of 0.7 cents in June.

For a residential customer using 700 kilowatt hours of electricity per month, bills will fall from $153.40 in February to $100.52 in June with the combination of reduced ECA and higher seasonal baseline, the amount of energy priced at the lowest-cost tier.

The ECA is charged equally among all ratepayers, from residential to large industrial customers.

The investor-owned utility that serves customers outside the Lodi city limits recently notified the California Public Utilities Commission that it plans to implement on March 1 an previously approved rate increase that will raise energy prices for industrial customers by 10.4 percent and by 3 percent for residential customers.

The Lodi Electric Utility has adopted a practice of purchasing energy at regular intervals to protect against short-term fluctuations in the power markets. Another factor in future rate stability and lower-cost pricing for City of Lodi customers is the proposed Lodi Energy Center, a 255-megawatt natural gas-fired power plant scheduled for a 2012 start date.

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