Two Public Hearings Slated on Proposed Rate Increases
WESTERN SAN JUANS – Following a wholesale power increase from the Tri-State Generation and Transmission Association, the San Miguel Power Association Board of Directors has started the process to implement a rate increase that will apply SMPA’s power-purchasing members after Jan. 1, 2013.
Tri-State’s Board of Directors recently announced that it would be handing down a 4.9 percent increase in the cost of wholesale power from Tri-State, as well.
In addition to that, according to SMPA General Manager Kevin Ritter, kilowatt hour sales have been falling at SMPA, while expenses continue to increase. Facing all of these factors, Ritter said SMPA must adjust its rates in order to continue to operate a healthy and reliable rural electric cooperative.
The increase, which has not yet been approved by SMPA’s Board of Directors, will be split between the energy charge and access charge members see on their bill each month. The directors, who approved to begin the process to implement the rate increase on Oct. 31, believe structuring the increase in that fashion is the best way to address the concerns of SMPA’s membership, while continuing to move towards a more balanced rate structure. SMPA Board President Rube Felicelli said last week that SMPA was able to absorb last year’s Tri-State wholesale rate increase through increases in the co-op’s access charge last year, but this year the cooperative will have to up the ante.
“We tried to minimize the effects of the increase last year, primarily with the access charge,” Felicelli said. “This year, it looks like we will have a smaller increase in the access charge, but we will also have an increase in kilowatt charges.”
SMPA’s access charge is similar to charges passed on by utilities, such as home phone, cell phone and cable or satellite TV services, in the form of a fixed monthly charge to cover the cost of providing service to customers’ homes. For SMPA, the monthly access charge is a fixed charge that allows the cooperative to recover fixed expenses such as property taxes, facilities insurance, depreciation and system maintenance. It is defined by a member’s rate class, and charged to every SMPA member regardless, of the amount of electricity they consume.
The energy charge, on the other hand, is determined by the amount of electricity cooperative members use; listed on energy bills as the kWh charge, it reflects the amount a member pays per kilowatt hour for the amount of energy consumed.
While Felicelli said increases in both access charges and energy charges mainly stem from Tri-State’s wholesale power cost increase, he said SMPA members have been consuming less energy, and that factor is also adding to the need to raise rates.
“For a variety of reasons, our revenue stream is lower than what we budgeted for this year. People are using less energy,” Felicelli said, adding that there are a number of reasons for this. “People are being more energy efficient, and with a mild winter and a mild summer, people used less energy.”
Felicelli agreed that it seems counterintuitive that as people become more energy efficient, rate increases kick in, but that SMPA will continue to push energy efficiency programs, regardless.
“I hope we don’t see any more increases from Tri-State,” he said. “They say their wholesale energy costs keep going up, and that is because they are mainly tied to coal. I go through their budgets and I can’t say they make a lot of sense to me, but it is what it is. We are tied to them with the contract.”
SMPA is also planning to change its Time of Use and lighting rate schedules as well.
SMPA’s Board of Directors will hold two informational hearings on the rate increases. The first will be held Tuesday, Nov. 27, at 9:30 a.m., at the SMPA’s Nucla office,170 W. 10th Ave. The second hearing will be held on Tuesday, Dec. 18, at 9:30 a.m., at SMPA’s Ridgway office, 720 N. Railroad Street.
In addition, all proposed and present rate tariffs are available for examination and explanation at SMPA’s offices in Nucla and in Ridgway. Anyone wishing to comment about the proposed changes may file written comments with SMPA at P.O. Box 1150, Ridgway, CO 81432.
The SMPA Board is expected to make a final decision on the new rates at its Dec. 18 meeting.