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What's behind SSVEC's rate request?
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| Sulphur Springs Valley Electric Cooperative Energy and Marketing Manager Albert Gomez walks through a residential attic in Sierra Vista while performing an energy audit recently. (MARK LEVY/ Wick Communications) |
Cooperative says cost of doing business, other issues have brought about proposal
By Laura Ory/Wick Communications
SIERRA VISTA - A first-class stamp was 29 cents, a gallon of gasoline was under $1.50 and Sulphur Springs Valley Electric Cooperative electric rate was 9.85 cents per kilowatt-hour in 1993.
Well, the electric rate has stayed the same for the past 15 years, but the costs to provide it have gone up, much like everything else, said Creden W. Huber, the electric cooperative's CEO.
That's why SSVEC has applied for a rate increase, he said.
The increase would take the 9.85 cent rate up to 11.83 cents per kilowatt-hour. SSVEC also wants a $5 increase for the cost of basic service, an amount charged no matter how much electricity is used, from $7.50 to $12.50.
With the rate increase, the customers could pay about 7 to 9 percent more compared to their current bill, said Jack Blair, chief member services officer for SSVEC.
Based on 2007 data, the average home uses about 741 kWh per month, resulting in a bill of about $89.74 from SSVEC. For the same amount of electricity, the same bill would reach about $100.59, or just over 12 percent higher, with the rate increase. But other factors, such as the continued increases in the cost of gasoline or greater energy use, would mean that number may actually be higher.
The electricity providing equipment SSVEC buys, from wire to wooden poles, has increased due to global and national demand and so has the power they buy, Huber said. Although SSVEC has not increased their electricity rate, their power provider, the Arizona Electric Power Cooperative, has. In 2005, a 15.44 percent AEPCO rate increase was approved, which resulted in a 9.7 percent increase to SSVEC members.
Along with the rate increase, AEPCO created a fuel and purchased power cost adjuster, which allows AEPCO to pass on changes in the costs of coal, natural gas and purchased power, every six months. Since 2005, AEPCO's bill has increased 40 percent, which resulted in a 24-percent increase in members bills, Blair said. For now, they expect AEPCO's bill to keep going higher.
Alternative energies such as solar and wind power are something SSVEC looks toward in the future as the technologies improve, but for now the cooperative is sticking with coal power to keep member costs low.
As news of the requested rate increase reaches members, SSVEC begins to get calls from concerned customers. As a nonprofit, it's in their interests to keep their expenses down, too, Blair said. They only expand their lines when it's needed.
"We build it when they pay us for it," Blair said.
SSVEC also has been able to delay a rate increase with other revenue means, such as contracting with Fort Huachuca, offering joint use of power poles and providing Internet service, Blair said.
They've also added automatic meter reading technology in rural areas, so they don't need to drive out to read meters. "We're doing what we can," Blair said.
Though overall revenues were about $4.6 million in 2007, they operated at a loss of about $900,000 in providing electricity to members.
Average customer energy use is also on the rise, meaning higher bills. But there is where customers can help reduce their bills, Blair said. "You'd be surprised at how much energy is wasted," Blair said.
Blair found a $15 reduction to his bill when he switched all his lights bulb to compact fluorescent ones. The cost of bulbs will eventually be absorbed in the savings.
Lowering your heating temperature in the winter and raising your air conditioning temperature in the summer also can make a difference. Just one degree can mean a savings of 3 percent on your bill, Blair said. Other common ways to save include checking your air filters regularly and unplugging appliances from outlets when possible.
SSVEC also offers free energy audits for customers who are using more energy than they should. After customers first review the possible reasons for their high energy use on the phone or online, Albert Gomez, a energy management specialist for SSVEC, may visit the home or business. Broken home thermostats, or a grill left on for days, can add hundreds of dollars to a monthly bill, Gomez said.
SSVEC includes other energy saving tips in their newsletters and Currents magazine, Blair said. They also are working on creating new ways to help customers reduce energy use.
The irrigation companies SSVEC serves have agreed to have their electricity supply cut off during certain times of the day, when energy costs more to provide.
In about three to four years SSVEC may be able to offer a similar system to residential customers, for hot water heaters and other appliances, Blair said.
They also hope to offer low-interest loans to customers interested in making an older home more energy efficient. For now, it might be worth investing in some energy-saving options before bills go up, Blair said.
The request has gone to the Arizona Corporation Commission, the state's utility regulatory agency, which will review it over the next few months. The public will be able to give their comments to the corporation commission.
If the rate increase is approved, it won't take effect until another 12 to 18 months, sometime late in 2009.
How much will it be?
The rate increase is expected to increase Sulphur Springs Valley Electric Cooperative's portion of your bill by 10 to 12 percent, based on 2007 figures.
To find out how the increase will likely impact you, take out one of your 2007 bill totals and multiply the total by 1.11. For example, if your average bill was about $100 each month in 2007, you can expect it be about $111 next year.
How am I charged?
You are charged by the number of kilowatt-hours, kWh, of electricity used. One 100-watt light bulb left on for an hour uses a tenth of a kilowatt-hour. A 3,500-watt air conditioner uses 3.5 kWh per hour. Your previous meter reading is subtracted from your present reading and multiplied by a set number to determine your kilowatt-hours used. Your billable usage is currently multiplied by 9.85 cents by SSVEC, as a per kilowatt-hour charge to cover the costs to purchase and deliver energy. The increase would set that amount at 11.83 cents.
Other charges
€ Cost of basic service: The monthly minimum for providing service, even if you use little or no energy during the month. The proposed increase is $5 to $12.50.
€ AEPCO fuel adjustment: Determines rate adjustment in connection with increase or decrease in the price of power. The current amount is $12.64 but will be absorbed into the base charge increase.
€ ACC Environmental Surcharge: A measure mandated by the Arizona Corporation Commission requiring nearly all Arizona utilities to generate or buy a portion of their power from renewable energy sources. The surcharge is associated with the development of these sources of energy.
€ Taxes: In 2007 SSVEC collected nearly $11 million in taxes. This money goes to the government.
There may be other charges you have chosen, such as Operation Roundup, which rounds up you bill total to the next whole dollar amount, to be used for charitable projects. The Sun Watts Green Contribution Program is another optional charge.
I don't like it. What can I do?
To find out more about the rate increase you can call the Arizona Corporation Commission at (520) 628-6550, and speak with a representative of their Consumer Services Section to find out more about the electric company's proposed rate increase. Your comments become part of the data that the Commissioners review prior to making their decision. Staff also can assist you or your community with procedures for filing petitions, arranging for a public comment session or providing information on becoming an official party to the case.
Sources: Sulphur Springs Valley Electric Cooperative and the Arizona Corporation Commission
Laura Ory can be reached at 520-515-4683.
By Laura Ory/Wick Communications
SIERRA VISTA - A first-class stamp was 29 cents, a gallon of gasoline was under $1.50 and Sulphur Springs Valley Electric Cooperative electric rate was 9.85 cents per kilowatt-hour in 1993.
Well, the electric rate has stayed the same for the past 15 years, but the costs to provide it have gone up, much like everything else, said Creden W. Huber, the electric cooperative's CEO.
That's why SSVEC has applied for a rate increase, he said.
The increase would take the 9.85 cent rate up to 11.83 cents per kilowatt-hour. SSVEC also wants a $5 increase for the cost of basic service, an amount charged no matter how much electricity is used, from $7.50 to $12.50.
With the rate increase, the customers could pay about 7 to 9 percent more compared to their current bill, said Jack Blair, chief member services officer for SSVEC.
Based on 2007 data, the average home uses about 741 kWh per month, resulting in a bill of about $89.74 from SSVEC. For the same amount of electricity, the same bill would reach about $100.59, or just over 12 percent higher, with the rate increase. But other factors, such as the continued increases in the cost of gasoline or greater energy use, would mean that number may actually be higher.
The electricity providing equipment SSVEC buys, from wire to wooden poles, has increased due to global and national demand and so has the power they buy, Huber said. Although SSVEC has not increased their electricity rate, their power provider, the Arizona Electric Power Cooperative, has. In 2005, a 15.44 percent AEPCO rate increase was approved, which resulted in a 9.7 percent increase to SSVEC members.
Along with the rate increase, AEPCO created a fuel and purchased power cost adjuster, which allows AEPCO to pass on changes in the costs of coal, natural gas and purchased power, every six months. Since 2005, AEPCO's bill has increased 40 percent, which resulted in a 24-percent increase in members bills, Blair said. For now, they expect AEPCO's bill to keep going higher.
Alternative energies such as solar and wind power are something SSVEC looks toward in the future as the technologies improve, but for now the cooperative is sticking with coal power to keep member costs low.
As news of the requested rate increase reaches members, SSVEC begins to get calls from concerned customers. As a nonprofit, it's in their interests to keep their expenses down, too, Blair said. They only expand their lines when it's needed.
"We build it when they pay us for it," Blair said.
SSVEC also has been able to delay a rate increase with other revenue means, such as contracting with Fort Huachuca, offering joint use of power poles and providing Internet service, Blair said.
They've also added automatic meter reading technology in rural areas, so they don't need to drive out to read meters. "We're doing what we can," Blair said.
Though overall revenues were about $4.6 million in 2007, they operated at a loss of about $900,000 in providing electricity to members.
Average customer energy use is also on the rise, meaning higher bills. But there is where customers can help reduce their bills, Blair said. "You'd be surprised at how much energy is wasted," Blair said.
Blair found a $15 reduction to his bill when he switched all his lights bulb to compact fluorescent ones. The cost of bulbs will eventually be absorbed in the savings.
Lowering your heating temperature in the winter and raising your air conditioning temperature in the summer also can make a difference. Just one degree can mean a savings of 3 percent on your bill, Blair said. Other common ways to save include checking your air filters regularly and unplugging appliances from outlets when possible.
SSVEC also offers free energy audits for customers who are using more energy than they should. After customers first review the possible reasons for their high energy use on the phone or online, Albert Gomez, a energy management specialist for SSVEC, may visit the home or business. Broken home thermostats, or a grill left on for days, can add hundreds of dollars to a monthly bill, Gomez said.
SSVEC includes other energy saving tips in their newsletters and Currents magazine, Blair said. They also are working on creating new ways to help customers reduce energy use.
The irrigation companies SSVEC serves have agreed to have their electricity supply cut off during certain times of the day, when energy costs more to provide.
In about three to four years SSVEC may be able to offer a similar system to residential customers, for hot water heaters and other appliances, Blair said.
They also hope to offer low-interest loans to customers interested in making an older home more energy efficient. For now, it might be worth investing in some energy-saving options before bills go up, Blair said.
The request has gone to the Arizona Corporation Commission, the state's utility regulatory agency, which will review it over the next few months. The public will be able to give their comments to the corporation commission.
If the rate increase is approved, it won't take effect until another 12 to 18 months, sometime late in 2009.
How much will it be?
The rate increase is expected to increase Sulphur Springs Valley Electric Cooperative's portion of your bill by 10 to 12 percent, based on 2007 figures.
To find out how the increase will likely impact you, take out one of your 2007 bill totals and multiply the total by 1.11. For example, if your average bill was about $100 each month in 2007, you can expect it be about $111 next year.
How am I charged?
You are charged by the number of kilowatt-hours, kWh, of electricity used. One 100-watt light bulb left on for an hour uses a tenth of a kilowatt-hour. A 3,500-watt air conditioner uses 3.5 kWh per hour. Your previous meter reading is subtracted from your present reading and multiplied by a set number to determine your kilowatt-hours used. Your billable usage is currently multiplied by 9.85 cents by SSVEC, as a per kilowatt-hour charge to cover the costs to purchase and deliver energy. The increase would set that amount at 11.83 cents.
Other charges
€ Cost of basic service: The monthly minimum for providing service, even if you use little or no energy during the month. The proposed increase is $5 to $12.50.
€ AEPCO fuel adjustment: Determines rate adjustment in connection with increase or decrease in the price of power. The current amount is $12.64 but will be absorbed into the base charge increase.
€ ACC Environmental Surcharge: A measure mandated by the Arizona Corporation Commission requiring nearly all Arizona utilities to generate or buy a portion of their power from renewable energy sources. The surcharge is associated with the development of these sources of energy.
€ Taxes: In 2007 SSVEC collected nearly $11 million in taxes. This money goes to the government.
There may be other charges you have chosen, such as Operation Roundup, which rounds up you bill total to the next whole dollar amount, to be used for charitable projects. The Sun Watts Green Contribution Program is another optional charge.
I don't like it. What can I do?
To find out more about the rate increase you can call the Arizona Corporation Commission at (520) 628-6550, and speak with a representative of their Consumer Services Section to find out more about the electric company's proposed rate increase. Your comments become part of the data that the Commissioners review prior to making their decision. Staff also can assist you or your community with procedures for filing petitions, arranging for a public comment session or providing information on becoming an official party to the case.
Sources: Sulphur Springs Valley Electric Cooperative and the Arizona Corporation Commission
Laura Ory can be reached at 520-515-4683.
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