Despite Rising Fire Mitigation Costs, SMPA Keeps Electricity Rates Unchanged in 2022

At their October, 2021 Board Meeting, the Board of Directors of San Miguel Power Association (SMPA) approved a budget for 2022 that avoids a rate increase on the consumer-members. This was despite news of price increases for materials, tools, and delivery of these related to recent global supply chain challenges. “Not one item that we use has been unaffected by these market conditions,” says SMPA Purchasing Supervisor, Rick Gabriel. “We’ve seen an across-the-board price hike of almost 20%.”

Hitting particularly hard, are the prices of materials and services related to SMPA’s increasing fire mitigation needs. With news of record-breaking Colorado wildfires in 2020 and the more recent Kruger Rock fire near Estes Park, Colorado that was sparked by a distribution power line, SMPA has been aggressively upgrading its equipment and clearing vegetation out of power line rights-of-way.

“One major challenge is that the cost of vegetation management has gone up sharply,” says SMPA Engineering Manager, Jeremy Fox. In cases where tree removal can only be done by helicopter, project costs have nearly doubled in the past year.”

Nonetheless, the SMPA staff was able to maximize efficiencies, and propose a budget to the Board of Directors that did not call for an increase in rates on the member-consumers of SMPA in 2022.  “The staff of SMPA has a great track record of maintaining tight margins and sticking close to their budget,” remarked one board member as the board approved the 2022 budget.

However, the options for avoiding a consumer rate increase in the future are still limited, especially given the ballooning costs and needs of fire mitigation. When the time comes to draw more revenue from the membership, the Board has recognized that an increase in the access fee (the fixed portion of a consumer bill) will bring greater balance to SMPA’s cost recovery mechanism while reducing financial risk. This charge remains the lowest of any neighboring cooperatives in the region. SMPA members are reminded to expect this charge to increase in the future.

“Running our cooperative in the middle of a supply chain crisis, a continuing global pandemic and unprecedented fire risk, due to drought conditions, is a significant challenge,” remarked Board President, Rube Felicelli, “but our Board and Staff are some of the best people I’ve ever worked with; that gives me a great deal of confidence in our ability to tackle it.”