exploring rate redesign options
To continue to fulfill our mission
To safely provide reliable electricity and services to sufficiently power the lives of our members and our communities.
Ensure rates are sufficient to cover the costs of operations
SDCEA invests millions of dollars into the electric system through our construction work plan, which improves our system reliability for all members.
To treat members fairly
SDCEA’s rate change does not significantly impact the cooperative’s total revenue and is designed to more equitably balance rates charged among various rate classes.
SDCEA Board of Directors to Consider Restructuring of Rates
The proposed rate changes will vary by class of service and amount of electricity used.
The proposed restructuring is aimed at ensuring that the electric cooperative can continue to provide reliable and affordable electric service to its members while also maintaining and upgrading its cooperative infrastructure. The restructure will show members the itemized costs to serve them and will re-balance costs to make the cooperative more financially stable and less influenced by external forces such as weather.
“We understand the importance of affordable and reliable electric service for our members, and we are committed to ensuring that our rates are structured in a way that better reflects the costs of providing electricity, said Paul Erickson, SDCEA CEO. “The proposed rate restructuring will help us achieve that goal.”
The proposed rate restructuring is the result of a comprehensive review of SDCEA’s rates, which include an analysis of the cooperative’s costs, usage patterns, and industry trends. If approved, the restructuring would result in changes to the rate components charged for various types of service, including residential and commercial.
“The board and cooperative staff have taken a careful approach in considering these changes and have been cost-conscious in decision-making on behalf of our members, while ensuring the continued supply of reliable, safe power,” said SDCEA CAO Sarah McMahon. “We are committed to ensuring that our rates are fair, transparent, and sustainable for our members.”
Members of SDCEA are encouraged to visit sdceaadvisory.com for up-to-date information about the proposed restructuring.
SDCEA is a not-for-profit electric cooperative serving 14,000 member accounts in Chaffee, Fremont, Custer, Lake, and Saguache counties.
SDCEA is committed to provide the best possible service to our members and at the least cost needed to provide that service. That’s why we will be phasing in future rate changes that will: (1) itemize the costs to serve our members and re-balance those costs to make the coop more financially stable in the face of rapidly changing internal and external costs, and (2) allow you to take control of your energy consumption and maximize savings on your electric bills in the years ahead.
These rate changes will allow us to continue to provide the same high level of service you expect and depend on to power your homes and businesses.
SDCEA is a member-owned not-for-profit electric cooperative, and that is why we are committed to serving our member-owners well. That means we strive to provide reliable electric service, including rapid response to outages, but also personal care in member services and energy programs. We work every day to control costs while supplying reliable, affordable electricity to our members who depend on this essential service. Costs to operate the cooperative are shared among all members in the most equitable way possible.
While SDCEA has not raised rates since 2017, materials and labor costs have increased. We must also continue to maintain and improve the infrastructure of our electric system to assure reliability. Wholesale power-supply prices to SDCEA are not constant, but vary based on off-peak and on-peak times when lesser or greater amounts of power are consumed.
Since 2020, SDCEA has been performing a review to determine if the current rates meet the objective of recovering the costs of doing business, treating members fairly, and encouraging member behavior that helps accomplish cooperative/public policy objectives.
From this review, we have determined that some changes to rates are needed. We want to alert and inform our members to these anticipated changes, which are expected to occur in 3 phases. These phases include:
- Phase 1 – Rate Restructure (Itemization of costs to be shown on bills & introduction of innovative member-choice rates)
- Phase 2 – Update of Cost of Service (COS) (the last COS was based on 2019 and costs have escalated significantly in the 3 years since)
- Phase 3 – Updated Rate Review (To be informed by the new COS)
Phase 1 changes are being considered by the SDCEA Board to be implemented in 2023. These changes are focused on: (1) a simple itemization of costs to be shown on member’s bills, (2) an increase in SDCEA’s Service Availability charge to cover basic fixed costs, and (3) rollout of introductory member-choice rates which provide members with the opportunity to better manage their electricity use and save money.
SDCEA will offer an introductory pilot program for members who would like to save on their electricity bills by taking part in our new Time of Use rate, where the cost per kWh varies based on when electricity is used. This is a voluntary rate – our members must elect to opt-in to it, limited to 300 new accounts.
Through this initiative, and a future plan for an energy demand rate, SDCEA is encouraging customers to shift as much electric usage as possible to times with lower power demands – encouraging smarter consumption that can lead to more savings on your bill. Education initiatives will also be offered to help members better understand how taking advantage of off-peak hours can benefit them financially.
In 2020-2021 SDCEA performed a Cost-of-Service Study (COS), which showed us whether each member class rates (residential, three-phase, and large power, for example) are adequately covering the costs of service, fuel, labor, equipment, etc. to serve those members. Based on the results of the study, we are restructuring rates to distribute costs more equitably to our members. Several factors went into this decision.
- To continue to fulfill our mission: To safely provide reliable electricity and services to sufficiently power the lives of our members and our communities.
- Ensure rates are sufficient to cover the costs of operations: SDCEA invests millions of dollars into the electric system through our construction work plan, which improves our system reliability for all members.
- To treat members fairly: SDCEA’s rate change does not significantly impact the cooperative’s total revenue and is designed to more equitably balance rates charged among various rate classes.
- Restructuring our rates will also mitigate the impact of the weather on collecting sufficient revenue to cover SDCEA’s costs when electricity sales fluctuate due to unpredictable weather patterns.
- Begin to decrease the amount of power purchased during peak-energy cost time periods: This saves members and the cooperative money on our power bills and helps give our members choices and better control over how much the cost is to run their home or business. It also encourages wise energy use and carbon reduction.
SDCEA’s board of directors will consider the restructuring of rates at its monthly meeting, March 29, 2023. If approved, the new rates will be reflected on the June 2023 electric cooperative’s bills.
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Open session to answer any questions members may have about the cooperative.
Two-day workshop for SDCEA's Board of Directors only to discuss the costs of service and how to set reasonable rates for members.
SDCEA Board of Directors to discuss findings of 2021 Cost of Service Study.
SDCEA Board of Directors consider staff recommendations for a proposed rate restructure of three phases.
The SDCEA Board of Directors at their regular meeting discussed a proposed rate restructure to be considered at their monthly meeting March 29th.
Members can review the proposed rate restructure and view their individual bill comparisons. Member comments can be emailed to firstname.lastname@example.org
SDCEA directors will consider the proposed rate restructure.
Members may request Time-of-Use opt-in if rate restructure approved March 29. Limited to 450 residential accounts and 50 non-residential accounts.
If approved, rate restructure will go into effect on member bills.
SDCEA Annual Meeting, Buena Vista High School
SDCEA receives updated Cost of Service Study (COSS) findings for 2022
SDCEA proposed Energy + Demand rate available as member opt-in.
Update rate review informed by results of new COSS.