At the last Electric Utility Board meeting on March 20th, we learned that LP&L has sustained operating losses of 4.9 million dollars from September 1, 2011 to date. Operating losses are projected to continue without a rate increase because of wholesale power increases by Excel Energy which the City Council has not passed through to Lubbock citizens. If that news isn’t bad enough, now it appears that one member of the EUB cannot legally serve on the board because he has a conflict of interest. In a memo obtained by Lubbock Power Grab, City Attorney Sam Medina concludes that Carroll McDonald, a recent appointee to the EUB, cannot legally serve because of a conflict of interest. Medina’s memo is here.
The problem with the McDonald appointment is that Carroll McDonald receives $2,500 per month from the city as “deferred compensation” pursuant to a contract he signed in 2005 when he was a consultant for LP&L. Although Mr. McDonald is no longer consulting for LP&L, the city is still paying him $2,500 per month. According to Medina, McDonald’s appointment violates the City Charter which prohibits any member of the ECB from having an economic interest in the profits of any public utility operating in the city. Because the city pays McDonald $2,500 a month for his past services to LP&L, he is deemed to have an economic interest in the profits of LP&L and he is disqualified to serve on the EUB.
Despite Medina’s opinion that McDonald is disqualified from service as an EUB member, no action has been taken by the city or the EUB board to remove him from his appointment or to make a new appointment to the EUB board.