LUB Discusses Reply to Recent Price Hikes

Wind Turbines

It seems as if everything costs more and that has become very apparent to the Lamar Utility Board when dealing with rising costs of equipment purchases.

Light Plant Superintendent, Houssin Hourieh, discussed how some equipment for the plant has increased since the items were last ordered, now with a wait time ranging from 13 to 32 weeks or more for a delivery.

The board approved several bids for equipment purchases including a low bid from Stuart Irby for $19,932 for 75, ten-foot braceless fiberglass crossarms, a bid from Bell Lumber and Pole for $69,823 for 45, forty-foot western red cedar poles and a variety of line materials from Western United for its bid of $13,852.96.

Hourieh was recently notified by mail from one company that produces transformers and had bid on one for the light plant five months ago for $418,888.  “We’ve received a letter that says because of their increased costs, the company is raising our price by 16.5% to $488,067, an increase of $69,179 after we had approved their earlier bid.  And it will take at least 52 weeks before we will be sent the transformer,” he explained to the board.  Hourieh added that it’s not like the plant can just shop around for a new one as there aren’t many companies that produce that type of equipment.  “Our options are few, we can find one that’s used or go for a rebuilt model, but it will still be a year out before delivery,’ he added.

Lance Clark, Utilities Board attorney, said he’d look into the company’s response, especially in light of the earlier agreement and the increased cost of the transformer.  Board chairman, Doug Thrall suggested that these increased costs for utility related materials might be in part from their urgent need in Florida following the devastating effects from Hurricane Ian.

The Lamar Utility Board approved $9,737.42, the Quarterly Support contract with Minsait ACS Incorporated.  Total purchase orders were $19,227.19.  Bills for October were paid amounting to $912,149.94 which included $806,422.08 for the monthly electrical power purchase from Arkansas River Power Authority.

The September financial statements show cash is up $217,352 from August and accounts receivable decreased by $247,141.  When compared to 2021 revenues from retail sales are up approximately $7,008 or less than 1% comparing September 2022 to last year at this time.  Overall operating expenses are up approximately $421,432 or 4%, resulting in a net loss of $247,530 for the year.

Light Plant Superintendent, Houssin Hourieh, noted that through the end of September, the Light Plant wind turbines have generated 9,661.25 MWH’s of electricity which is about 0.45% higher than the same period in 2021.  The Springfield turbine generated 4,312.48 MWH’s through the same period with an average capacity factor of 43.91%.

The board went into executive session for legal questions related to contract negotiations.
By Russ Baldwin