Why Do I Pay A Service Availability Charge?

 

By Paul A. Erickson • Chief Executive Officer • info@myelectric.coop

In order for electricity to be available at a home or business when a consumer wants to flip a switch or turn on an appliance and use that power, it takes a certain investment in field equipment which must be energized, functioning and available to provide electricity when you may want it.

For example, when a consumer leaves their home or business, power to a property is not put away, out of use. It is left available for the evening, day, week, month or year that the consumer returns and wants to use electricity again.

The Service Availability Charge is a flat fee designed so that all Sangre de Cristo consumers pay their fair share of the cost of investment in the poles, wires, transformers and equipment that it takes to provide you with electric service. It also supports required services such as line maintenance, right-of-way clearing, fleet maintenance and general administrative responsibilities. Regardless of how frequently or infrequently you flip on the light switch or turn on the TV, these costs are part of the bill you pay so electricity is available to you whenever you want it.

Sangre de Cristo Electric Association, Inc. only serves (roughly) seven consumers per mile of distribution power line. Utilities like Xcel serve around 35 per mile, while municipalities like Colorado Springs serve around 50.

As a rural electric cooperative with rugged terrain and harsh conditions, it costs us far more to maintain each mile of power lines than it does in many other areas, including service territories in Colorado. This, combined with our low density, results
in higher costs per consumer in comparison to other locations. Our electric usage per consumer is very low. SDCEA serves no industrial load nor any large loads. Furthermore, the mild valley climate results in very few of our consumers requiring or having air conditioning. Almost 50 percent of our residential consumers are seasonal users.

So how can we pay for the debt borrowed to construct the system, along with all of the accompanying costs to run the cooperative, when frequently nearly half of our members use little to no electricity? If we tried to pay for this through the variable kilowatt-hour charge, the consumer who uses very little electricity (the seasonal consumers) would pay for very little of the fixed costs. The consumers who live here year-round and use more electricity would pay more than their share of those costs. We don’t think that’s fair. Charging a Service Availability Charge to everyone is how we make sure every consumer pays their fair share of the costs, making sure the year-round consumers don’t subsidize the seasonal consumers.

SDCEA conducts cost studies with  independent rate consultants. Recommended changes to rates and rate structure are reviewed and approved by a board of directors who are consumers just like you, who represent you on the board. If you wish to review those rates or our policies, they are available any time on our website under the Members Only section after you create a sign-in.

SDCEA’s staff wants to provide fair and reasonable rates and a safe, reliable power supply to the communities in which we live. We are continually reviewing our rates and business practices to do so.