Cost of Service and Rate Study

In keeping with our mission to provide high-quality, competitively priced services, LUS initiated a Cost of Service and Rate Study in June 2021. For this study, LUS partnered with its engineer of record, Burns & McDonnell, a consulting engineering firm that provides engineering, architecture, construction, environmental, and consulting solutions worldwide.

The purpose of the cost of service was to analyze the current operation/maintenance and capital costs to provide electric, water, and wastewater services across the different customer classes and evaluate the capital improvements plan to manage system expansion and aging infrastructure. Additionally, LUS has an obligation to provide a cost of service rate study when applying to the State Bond Commission for the issuance of bonds and qualifying for state/federal grants.

LUS’s audited financials, adopted budget, and projected revenue requirements for operation/maintenance and capital costs were used in the study. Based on the results of the cost of service study, rate changes are needed for the electric, water, and wastewater system. The rate study was developed to align LUS’s costs and revenues across all rate classes, including an analysis on the average residential bill impacts.


Proposed Base Rate Revenue Changes

  • Electric:           +3.0% per year in FY 24 & 25
  • Water:             +8.0% per year in FY 23, 24, & 25
  • Wastewater:    +9.5% per year in FY 23, 24, & 25


Pilot Program: Time of Use – Effective FY 22-23

To incentivize customers to consume energy when demand and costs are lower, a new rate structure of time-varying rates, or Time of Use (TOU), will be offered, resulting in more balanced energy demand throughout the day.

  • Residential customers only – Opt-in (12-month commitment)
  • Ability for customers to change their habits and potentially save money
  • TOU rate for low-cost, off-peak consumption
  • Time of Use Periods
    • On-Peak hours: 8 a.m. – 10 p.m.
    • Super Peak hours: 2 p.m. – 7 p.m. (Summer only)
    • Off-Peak hours: 10 p.m. – 8 a.m.


Public Meetings Held

  • August 23, 2022 – South Regional Library – 5:30 p.m. to 7 p.m.
  • August 24, 2022 – Main Library – 5:30 p.m. to 7 p.m.

Presentation from Public Meetings

Information & Discussion on Rate Proposal