Electric bills likely to increase
Consumers can expect to see an increase in their electric bill this summer.
Socorro Electric Cooperative General Manager Polo Pineda told the board of trustees at last week’s regular meeting that he expects rates to go up about 3.5 percent — maybe more, if Tri-State Generation and Transmission Inc. announces a rate increase.
“I want to prepare the board,” Pineda said. “We’ll wait until June when Tri-State announces, but it doesn’t look like they’ll raise rates.”
Tri-State distributes electricity to 44 rural electric cooperatives in four states. Local electric rates largely depend on the cost Tri-State charges the co-ops.
SEC currently provides some of the lowest rates, Pineda said, and hasn’t increased charges in about four years.
Kathy Cobb of SGS Engineering LLC, a consulting firm for the electric utility industry, said rate increases are generally passed on to the consumer.
Cobb was on hand to report on her examination of SEC’s long-term financial forecast. She said at $69.49 per month, the average consumer cost for residents served by the SEC was much lower than what customers served by other co-ops were paying. By comparison, the average cost for consumers in two neighboring co-ops, which she did not name, were $76.85 and $90.91.
“I found that to be a very interesting statistic,” she said.
Pineda said the SEC is planning for a cost adjustment of about 1.7 cents per kilowatt hour. That number would go up if Tri-State increased its rates, he said.
“I don’t know what Tri-State will do. We might have to look into rolling that into base rates,” he said.
Trustee Donald Wolberg pointed out that a debate over the use of cleaner energy sources going on in Colorado could result in higher rates throughout the Tri-State service area. If regulations are changed mandating less use of coal and more natural gas to generate energy, rates could go up significantly.
“Then they (rates) could go way up,” Pineda responded.
Another component that goes into figuring rates is the system charge, and Pineda said it’s likely that charge will also increase.
At $9, the SEC’s system charge is also one of the lowest, he said, and Cobb affirmed the claim.
“That’s very low on the customer charge. Most are in the $17 to $20 range,” she said.
Cobb said it’s probably time for SEC to increase the system charge. It being inevitable that Tri-State will eventually raise its rates, she said consumers wouldn’t experience the “double whammy” of a bigger rate and system charge increase at the same time.
Having analyzed the financial forecast, Cobb said SEC needed to increase its revenue to remain solvent.
“What this is saying is this will require about $750,000 additional revenue,” she said.
Cobb used an annual increase of 5 percent in developing the financial forecast for a $24 million USDA loan that will finance the co-op’s work plan. The interest rate is locked in at 4.62 percent over 35 years.
Contact T.S. Last