For the purposes of this division, “the board” shall
mean the electric utility board of the City of Lubbock.
(1983 Code, sec. 2-478; Ordinance 2004-O0021, sec. 1, adopted 2/19/2004; Ordinance 2004-O0140, sec. 1,
adopted 12/16/2004)
Pursuant to chapter 1, article XII, section 1, of the Lubbock City Charter, the City of Lubbock’s municipally owned electric utility, known as Lubbock Power & Light, shall be governed and managed by a board appointed by the city council, such board to be known as the electric utility board. The city’s electric utility shall have as its primary purpose the provision of dependable and reliable electric service at reasonable and competitive rates to the citizens of Lubbock while being financially self-sustaining.
(1983 Code, sec. 2-479; Ordinance 2004-O0021, sec. 1, adopted 2/19/2004; Ordinance 2004-O0140, sec. 1,
adopted 12/16/2004)
(a)
The number of board members and their terms are governed by chapter 1, article XII, section 1 of the Lubbock City Charter and shall be considered officers of the City of Lubbock. No board member shall serve more than four consecutive terms. However, for any board member appointed to fill a vacancy which occurred prior to the end of a full term, and the appointees original term was for one year or less, such original term shall not apply towards the four-term limitation outlined herein. The city council shall consider extensive business and/or financial experience as a qualification for serving on the board as well as whether or not the individual is a customer of the city's electric utility provided that service with the city's electric utility is available. The mayor or the mayor's appointee shall serve as an ex-officio, nonvoting member of the board.
(b)
The
board members shall serve without compensation. The board may reimburse
board members for expenses incurred in performing their duties as
board members.
(c)
The
board members shall not be indebted to the city or the city’s
electric utility, and shall not be interested in the profits or emoluments
of any contract, job, work or service for the city or the city’s
electric utility. The board members shall not have a substantial interest
in any public utility operating within the City of Lubbock and shall
fully disclose any potential or actual conflict of interest to the
city council. Substantial interest shall mean substantial interest
as defined by the laws of the State of Texas regulating conflicts
of interest of officers of municipalities.
(1983 Code, sec. 2-480; Ordinance 2004-O0021, sec. 1, adopted 2/19/2004; Ordinance 2004-O0140, sec. 1,
adopted 12/16/2004; Ordinance
2006-O0135, sec. 1, adopted 1/12/2007; Ordinance 2019-O0168, sec. 1, adopted 12/3/2019; Ordinance
2023-O0143 adopted 11/14/2023)
Pursuant to and subject to chapter 1, article XII, section 1, of the Lubbock City Charter, the following powers, as they relate to the city’s electric utility, are for the sole and exclusive use and authority of the city council:
(1)
Establishing,
changing, altering or otherwise setting the electric rates of the
city’s electric utility, including all components thereof;
(2)
Approving
the budget of the city’s electric utility;
(3)
Exercising
powers of eminent domain for the benefit of the city’s electric
utility;
(4)
Issuing
bonds or otherwise creating any indebtedness in the name of the city
for the benefit of the city’s electric utility that is secured
by the general tax revenue of the city, the net revenue of the city’s
electric utility or the pledging of the assets of the city’s
electric utility; and
(1983 Code, sec. 2-481; Ordinance 2004-O0021, sec. 1, adopted 2/19/2004; Ordinance 2004-O0140, sec. 1,
adopted 12/16/2004)
(a)
The
board shall approve an annual budget and electric rate schedule for
the city’s electric utility, submit the budget and electric
rate schedule to the city council for approval by filing the same
with the city secretary, and be responsible for the proper implementation
of each following adoption. The board may, as required from time to
time, submit to the city council for its approval amendments to the
budget and/or electric rate schedule.
(b)
The
board shall authorize and oversee an audit of the city’s electric
utility system and shall report any and all findings of such audit
to the city council. The board may authorize such audit to be performed
by an external auditor. The external auditors must be a certified
public accounting (CPA) firm that has the experience and depth of
staff to audit the city’s electric utility in accordance with
generally accepted auditing standards and contractual requirements.
The audited financial numbers must be completed and reported to the
city’s accounting department in sufficient time for the comprehensive
annual financial report to be presented to the city council per the
audit schedule. The auditors are accountable to the board and will
have access to direct communication with the board if staff is unresponsive
to auditor recommendations or if the auditors consider such communication
necessary to fulfill their legal and professional responsibilities.
(c)
To
the extent authorized by law and subject to the city’s charter
and Code of Ordinances, the board shall have all authority necessary
to govern, manage, administer and operate the city’s electric
utility including the authority to contract for accounting, financial,
human resource, legal and other services separate and apart from those
services currently being provided by the city. Furthermore, this authority
includes, without limitation, the right of the board to enter into
contracts in the name of the city relating solely to the operation
and management of the city’s electric utility including the
right of the board to establish any and all policies relating to the
administration and implementation of contracts related solely to the
city’s electric utility. If the board contracts for legal services
separate and apart from the city attorney’s office, the legal
counsel for the board shall also report to and be responsible to the
city council of the city.
(d)
No
person related within the second degree by affinity, or within the
third degree of consanguinity, to any member of the board, the city
council or the city manager shall be appointed as director of the
city’s electric utility.
(e)
To
the extent authorized by law and subject to the city’s charter
and Code of Ordinances, the board shall be responsible for recommending
individuals to the city council for their consideration in appointing
individuals to the board.
(1983 Code, sec. 2-482; Ordinance 2004-O0140, sec. 1, adopted 12/16/2004; Ordinance 2004-O0021, sec. 1,
adopted 2/19/2004; Ordinance
2006-O0135, sec. 2, adopted 1/12/2007; Ordinance 2012-O0026, sec. 1 (ex. A),
adopted 4/10/2012; Ordinance
2019-O0168, sec. 2, adopted 12/3/2019)
(a)
The
director of electric utilities shall be the chief administrative officer
of the city’s electric utility and shall report to the board
for the proper administration, management and operation of the city’s
electric utility as directed and authorized by the board, the city
charter and/or the city’s ordinances and resolutions. The director
shall be responsible for preparing the annual budget and fee schedule
for the city’s electric utility and shall present the budget
and fee schedule to the board for their approval prior to the board
submitting such budget and fee schedule to the city council.
(b)
The
director of electric utilities shall not have a substantial interest
in any public electric utility operating within the City of Lubbock
and shall fully disclose in writing any interest, including any potential
or actual conflict of interest, to the board. For purposes of this
section only, “substantial interest” shall not include
any pension, retirement income or retirement benefits received by
the director of electric utilities.
(c)
A director of electric utilities who ceases to possess any of the qualifications outlined in this section shall forfeit the position, and any contract in which the director shall or may become interested may be declared void by the board. Failure by the director of electric utilities to disclose the interest outlined in subsection (b) above shall be a class C misdemeanor, and, on conviction thereof, such employment shall be forfeited.
(1983 Code, sec. 2-483; Ordinance 2004-O0021, sec. 1, adopted 2/19/2004; Ordinance 2004-O0140, sec. 1,
adopted 12/16/2004; Ordinance 2023-O0143 adopted 11/14/2023)
(a)
Prior to paying any fee equivalent to a franchise fee, making
any payment in lieu of taxes (PILOT), and prior to disbursing any
funds from appropriable net assets (the "general reserve") of the
city's electric utility, the board shall first fully meet all
bond reserve or fund obligations defined in any bond covenant for
the city's electric utility.
(b)
After providing for sufficient funds to meet the obligations contained in subsection (a) above, by the end of the fiscal year, the board shall ensure that the general reserve meets the requirements to maintain a range of 90 to 200 days operating cash. This range is sufficient to meet an A to AA credit rating, as defined by Standard & Poors Global Ratings. The board may create a reserve target within the policy range such that the utility may achieve a higher credit rating. The reserve calculation shall be derived by dividing LP&L's annual budgeted total expense divided by 365 times 90 days for the minimum and 200 for the upper bound. A calculation of the days cash reserve shall be performed at the end of each fiscal year to determine compliance with the above policy. A reserve balance below 90 days cash shall be properly addressed with a plan to correct within three years as determined by the EUB.
(c)
The board may use the general reserve for rate stabilization,
future obligations, unforeseen emergency situations, and for meeting
the electric utility demand of any rapid or unforeseen increase in
residential and/or commercial development.
(d)
Beginning October 1, 2023, the franchise fee equivalent (FFE)
rate and PILOT rate will be based on a per kilowatt hour basis. The
FFE rate will be based on a budgeted amount (calculated as the three-year
average of FFE paid in FY20, FY21, FY22) to be collected then divided
by the expected total system load for the budgeted year. The rate
determined will remain fixed with FFE income changing with load volumes.
The PILOT rate will be based on the amount of the City of Lubbock's
calculated ad valorem property tax estimate as of April 30th each
year for LP&L and divided by the expected total system load for
the budgeted year.
The transfers shall be made on the 15th day of each month and
shall be based on the kWh sales of LP&L during the preceding calendar
month.
For budgeting purposes, on or before May 1st of each year, the
board shall report to the city council their estimate of the general
reserve, the kWh sales and the resulting franchise fee and PILOT.
(e)
Subject to the approval of the board, any general reserve balance
above board policy limits may be refunded to the ratepayers of the
city's electric utility in the form of rate reductions in the
next cost of service rate update following the fiscal year in which
the general reserve balance exceeds the board policy.
(1983 Code, sec. 2-484; Ordinance 2004-O0021, sec. 1, adopted 2/19/2004; Ordinance 2004-O0118, sec. 1,
adopted 10/29/2004; Ordinance
2004-O0140, sec. 1, adopted 12/16/2004; Ordinance 2006-O0135, sec. 3,
adopted 1/12/2007; Ordinance
2008-O0096, sec. 1, adopted 11/20/2008; Ordinance 2012-O0026, sec. 1
(ex. A), adopted 4/10/2012; Ordinance 2023-O0143 adopted 11/14/2023)
To the extent authorized by law and subject to the city's charter
and Code of Ordinances, the board shall be responsible for recommending
any amendments to this division.
(1983 Code, sec. 2-485; Ordinance 2004-O0021, sec. 1, adopted 2/19/2004; Ordinance 2004-O0140, sec. 1,
adopted 12/16/2004; Ordinance
2006-O0135, sec. 4, adopted 1/12/2007; Ordinance 2023-O0143 adopted 11/14/2023)
