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Report: LUS sale could mean higher utility rates, “significant” workforce reductions

Posted: 12:44 PM, Aug 15, 2018
Updated: 2018-09-12 10:34:52-04

LAFAYETTE – The report that Mayor-President Joel Robideaux commissioned to study a potential offloading of parts of Lafayette Utilities System suggests a sale could result in higher utility rates, “significant” workforce reductions and a loss of up to $800 million in government revenue over time.

NewGen, the consultant of record for LUS, created the white paper in July 2017 at Robideaux’s request, according to the report.

The consultants write that benefits of a sale could include a release from the risk of running the systems, the liability of employee and public safety and the costs associated with storm exposure and outages.

They suggest the costs could include “higher utility rates” and the “loss of local control” over rates, responsiveness and reliability.

A sale also could include “significant” workforce reductions, the consultants write, although they say they did not study how likely that would be or how many positions could be eliminated.

A sale of either the LUS electric or fiber system “will not likely meet or exceed LCG’s investment value,” NewGen writes, noting that selling the electric system alone would be the most costly scenario.

They suggest that LCG would be most “incentivized” to sell the telecommunications system, LUS Fiber, along with the electric system — or to sell the fiber system alone.

A combined sale of the electric and fiber systems could result in a loss of revenue to LCG “on the order of $0.4 billion to $0.8 billion over time,” according to the report.

KATC obtained the report through a public records request. Read it for yourself here .