exploring rate redesign options
Determine if rates are sufficient
to cover the cost of operation
Ensure members aren’t overpaying
or underpaying their individual
share of costs, to the extent possible.
Explore rate options that help members and the cooperative save energy and money
Why are rates higher here than elsewhere?
SDCEA serves about seven members per mile of line, compared to investor-owned utilities such as Xcel Energy, which averages 34 customers per mile of line; and municipal utilities, which average 48 customers per mile of line. While we work hard to keep costs as low as possible, SDCEA’s smaller number of consumers must cover the costs of delivering power over nearly 1,800 miles of line on our system. Our locations are rural, hard-to-reach, mountainous and rugged.
At SDCEA, we don’t benefit from the revenue that dense cities generate for utilities, and we don’t have large businesses to speak of to help carry the cost of providing service in this territory.
As an electric distribution cooperative, we don’t independently generate power. We buy it from others. While we do all we can to buy power as cheaply and as environmentally consciously as possible, the cost of electricity is going up here and around the country for a whole host of reasons.
When it comes to delivering power to your home or business, we in rural America are largely on our own. This means that SDCEA and our members bear the expensive burden of engineering, erecting and repairing power-delivery infrastructure ourselves. We are also responsible for maintaining the system. The equipment, materials and employee hours to do this work are expensive. We cannot spread these costs among a high number of consumers, so that means we have to be very careful about how we use the resources we have.
We want you to know that we are members of the cooperative, too, and we hear that you are concerned about costs. We want to assure you that we share those concerns as a locally-controlled nonprofit organization, and we are working every day to support our communities and keep costs down while providing safe and reliable electricity for you, our consumers. It’s a big job, but it’s one we take pride in.
Manager of Rates &
Power System Engineering
No, it was not illegal.
Our cooperative worked with Power System Engineering (PSE), an industry leader in consulting and engineering services, to restructure our rates to more equitably distribute costs among the membership.
The proposed rates separated the costs of actual energy delivered or received, and distribution services – the cost of delivering the electrons, the energy, to the members’ location. It also covers demand charges from our wholesale power supplier, Tri-State. However, the restructured rate was rescinded last year due to extreme opposition from a segment of the membership.
The proposal complied with state statutes and regulations, including allowing consumer generators to offset their energy usage. For net-meter consumers, they would have been able, as they are now, to bank energy month-to-month and get paid for annual excess generation, as required by law, at the end of the year.
As part of our commitment to provide safe, reliable, and affordable services to our members, we continue to work with PSE to find a comprehensive financial model that is fair and equitable to all our members. You can stay up-to-date on the SDCEA rate restructure process by following this page located on our website.
SDCEA’s bylaws, rates, policies, meeting summaries, board contacts and other information is posted on the top of our home page under the Governance button for our members to review at any time. Review this information.
We also welcome you to call us during business hours toll-free,
We listened to the concerns of our members. The proposed April 1, 2022 implementation of the rate redesign was rescinded by the SDCEA board of directors in March and SDCEA has asked our rate consultants to provide alternative rate redesign options that take our members’ concerns into consideration.
Utility-scale solar energy costs SDCEA roughly 2 cents per kWh through our wholesale power supplier, Tri-State G&T. This low cost is due to the large size and output of utility-scale renewable projects. Community-scale solar (such as the Trout Creek Solar project south of Buena Vista) costs about 5.6 cents per kWh, and SDCEA purchases rooftop energy for 12.944 cents per kWh.
We’re leading by example delivering affordable, reliable and responsible electricity to power what matters to you.
With 50% of your energy coming from renewable sources by 2024.
SDCEA Board of Directors
September 6-7th, Buena Vista
This is a two-day workshop for SDCEA's Board of Directors only to discuss the costs of service and how to set reasonable rates for members.
We will have an open session to answer any questions members may have about the cooperative.