Lansing To Raise Steam Prices?

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Published August 10, 2006
BWL chair opposing 65% steam rate hike
City Council, utility's board to weigh increase
By Tom Lambert
Lansing State Journal
Lansing's Board of Water and Light is struggling with two options to balance its budget this year: Hit downtown businesses with a hefty boost to their steam bill or increase health care costs to employees and retirees.
Neither option is popular, and the Lansing City Council will be seeking answers from the BWL at a meeting today.
The utility's commissioners have proposed to increase steam rates - mostly affecting downtown businesses - by 65 percent. Businesses voiced their displeasure about that option at a hearing earlier this month. A final vote will come at 5:30 p.m. Tuesday.
To help solve its financial woes, BWL also looks to increase prices for its 98,000 electricity customers by 1.5 percent. The increases would be effective Sept. 1.
Robin Smith, chairwoman of the utility's board of commissioners, said she doesn't support the 65 percent steam increase.
"But there was no middle ground given to us by management - it was either cut health care costs or increase steam rates," said Smith, who said she probably would recuse herself from Tuesday's vote since she is a trustee at Lansing Community College - one of BWL's largest steam customers. "I don't think we should increase health care premiums for our employees and retirees. We need to come up with another option."
BWL General Manager Sanford Novick, whose contract expires Aug. 18, said he proposed to increase steam rates 35 percent, but health care premiums for retirees and employees would have to be raised.
"We made our recommendations, and they decided against them," Novick said. "The commissioners came up with a different scenario."
BWL management proposed up to a 25 percent increase in health care premiums to employees and a 5 percent boost to retirees.
Retirees are fully covered and employees receive 95 percent of their health care.
BWL management and the International Brotherhood of Electrical Workers 352, which represents 414 BWL employees, are expected to start contract negotiations soon. The current pact expires Oct. 31.
Many downtown business owners are upset at the proposed steam increase, with several showing up at the BWL's recent public hearing.
Ron Boji, who owns several downtown buildings, would take a severe financial hit if the increase goes through, said John Truscott, a local public relations executive representing Boji. The Boji Tower would see a $120,000 increase in its annual steam bill.
"That would just be passed along to the tenants," he said. "Then you start impacting if people stay downtown or not."

Contact Tom Lambert at 377-1063 or tlambert@lsj.com.

Copyright 2006 Lansing State Journal