Cost of Service Study Results
Sangre de Cristo Electric Association (SDCEA) conducted a comprehensive review and evaluation of the rates we charge for providing electric service to our consumers.
Power System Engineering, a national firm that specializes in conducting cost-of-service studies, was retained by SDCEA over the past 18 months to evaluate rates and charges to all consumer rate classes, the income received from various rate classes, and to weigh those findings against the actual cost of providing services in each rate class.
The good news from the study: SDCEA learned there is no need to enact a general rate increase. SDCEA has not enacted a general rate increase since 2017. The review also found, in part, that in some rate classes more than enough money was collected to pay for costs. In other classes, not enough revenue was collected to pay for costs. This is referred to as “cross-class subsidization.” SDCEA’s goal is to reduce, to the extent possible, subsidies between rate classes. In other words, SDCEA’s objective is to make sure consumers are paying the fairest cost possible for their electric service, and not more than or less than their share.
The cost-of-service study findings also support SDCEA’s recognition that consumers would prefer, and would benefit from, new tools and options to allow more control over their electric usage and utility bills. Now that the cost-of-service study is complete, SDCEA plans to roll out some new rate options from which consumers may choose beginning in February 2022. We’ll take a look at consumer options next month, including how you can use tools and information to decide which option may be the best for you.