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The original item was published from 7/29/2022 12:43:23 PM to 10/2/2022 12:00:01 AM.

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Utilities

Posted on: July 31, 2022

[ARCHIVED] Rate Design Keeps Infrastructure Safe and Sound for the Future

LCU Provencio (002)

By Cassie McClure 

Published in Las Cruces Sun News on 7/31/2022

Setting the rates people pay for utility services has been the job of Las Cruces Utilities (LCU) Deputy Director Business Services Jose Provencio for over 40 years. But it could have been different if he had decided to take the job at the power plant instead of the new rates department at El Paso Electric (EPE).

“I was more curious about what they’d be doing,” he said. The rest was history. After graduating from New Mexico State University with an engineering degree, Provencio became an EPE manager for regulatory affairs. After his first retirement in 2008, he had the opportunity to join LCU, but as of July 31, 2022, he will be trying his hand at retirement again. During his last weeks at LCU, Provencio reflected on his time helping to dig deeper into the infrastructure needs of the community and how those are met by the rates paid by its customers.

Provencio said, “That’s our mandate: We must provide services as requested by our customers and developers. The challenges are to operate, and appropriately fund, an enterprise fund, which is how the Utilities department is structured. Each utility operation – Natural Gas, Water, Wastewater, and Solid Waste – has rate charges that recover revenue to cover operations and maintenance, salaries and benefits, and capital projects.”

The rate design and rate setting process that has evolved at LCU focuses on each Utility operation. “The review process examines the financial position of an audited financial statement and cash requirements to cover known and measurable operating and maintenance expenses, cost of materials and supplies, salaries and benefits, construction and rehabilitation projects,” he said.

Provencio and his team not only examine historical financial and operating data but research the unique characteristics of each of the Natural Gas, Water, Wastewater, and Solid Waste operations. He explained that, for example, Water operations have huge equipment and infrastructure that pumps and treats water from the ground, stores water in huge tanks, and distributes and boosts water throughout the city to supply all customers. 

“Wastewater operations also have a huge infrastructure to collect and bring sewage to the treatment plants to clean and treat wastewater for safe discharge,” he said. “On the other hand, Solid Waste operations have specialized collection trucks that pick up and transfer trash waste to the transfer station for burial at the landfill. Each Utility operation has a unique infrastructure, construction, and support requirements to meet its objective of serving our customers.”  

The rate reviews quantify the revenue required for each utility to cover expenses, fund construction, and pay debt obligations to ensure services will be provided to our customers. 

"During the rate review for Solid Waste operation several years ago, LCU realized that trash trucks were not replaced soon enough and were in the repair shop and affected trash pickup schedules,” said Provencio. “So, the increase in rates for Solid Waste service involved setting a schedule to replace aging Solid Waste collection trucks to ensure reliable trash pick-up for our residential and commercial customers.”

“The Utilities Department’s prime responsibility is to provide quality reliable utility services 24/7, and LCU must have the infrastructure, qualified staff, field crews, technicians, and engineers to pump and distribute water, collect and treat wastewater, procure and distribute natural gas and collect and dispose of solid waste on demand and on schedule,” said Provencio. “My experience has been involved on the financial and rate setting side of a business model that is always online and plans well into the future so that our customers are continually provided natural gas, water, wastewater, and trash services.”

LCU – Your Utility Connection. Customer Central can be reached at 575-541-2111 from 8 a.m. - 6 p.m. Monday through Friday. LCU provides clean, safe, and reliable services to Las Cruces residents and businesses. Learn more at: las-cruces.org/180/Utilities  

For emergencies, call Dispatch at 526-0500. 

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PHOTO 1: After a career in rate design to make sure that infrastructure is safe and updated, LCU Deputy Director Business Services Jose Provencio is retiring. 

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