Co-op correcting overcharges
Socorro Electric Cooperative overcharged its customers again. Only this time, the error was caught quickly and customers are already being paid their money back.
At Wednesday’s meeting of the co-op’s board of trustees, General Manager Joseph Herrera said Socorro Electric over collected more than $500,000 during the last quarter of 2011. About $309,000 in overcharges were in debt cost, he said, and about $217,000 were for fuel cost.
The only questions trustees asked about the error were how the money would be paid back and whether the co-op needed to inform customers about it.
Herrera said the money would be paid back by applying a credit to customer accounts, which would be reflected on their bills. Trustee Prescilla Mauldin said customers probably didn’t need to be notified because it would be reported in El Defensor Chieftain.
After the meeting Herrera said the errors occurred because forecasts overestimated debt and fuel costs.
“The over-collection had to do with projecting a quarter in advance,” he said. “The debt cost adjuster is based on interest on loans, so if there’s a draw down (the debt cost) fluctuates. So it’s a moving target and what happened is we had overestimated the debt cost adjuster.”
Herrera said the expectation was that there would be a draw down on the loan financing the new Quemado substation – a $2.5 million project financed through a USDA Rural Utilities Service loan – but that didn’t happen.
As for the fuel cost, the projections – based on historical data – were that the cost for power would be higher, he said. Customers were using more energy during off-peak hours than expected.
“We delivered more energy, but it was during off-peak hours,” he said. “It’s done quarterly, so if it’s off the first month, you have to ride it out. It’s like you throw a dart and after it’s left your hand the target has moved.”
Herrera said some customers have already seen the credit applied for fuel cost reflected on their bills and those who haven’t will see it show up on their next bill. The debt cost adjustment will be reflected on their bill the following month, he said.
In September 2010, it was discovered that Socorro Electric overcharged its customers approximately $1.6 million over a five year period. That mistake occurred when rates were last adjusted and the debt and fuel costs were miscalculated when rolled into the base rate. Customers were paid back in the form of a patronage capital check but not until the following year.
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