SMPA Board to Consider Raising Access Charge to Build Financial Stability & Cover Rising Costs

It’s well-known that worldwide inflation has affected practically every economy, and the market for electrical equipment and tools has not been spared. Business expenses for local power provider, San Miguel Power Association (SMPA) have risen and are likely to remain higher than pre-pandemic levels. Additionally, SMPA is anticipating a cost hike of over 6% for its wholesale power, which accounts for approximately 52% of the non-profit cooperative’s overall expenses.

With these factors in mind, the SMPA staff is planning to propose a $2 increase to its access charge. Currently, the single-phase access charge that most residential members pay each month, stands at $23.00 per month. If approved, the increase would bring the fixed charge, which is intended to cover fixed costs of grid maintenance and system hardening, to a total of $25.00 per month—still one of the lowest grid-access fees in the region.

“This $2 increase will not cover the projected increase in our wholesale power costs,” says SMPA Chief Executive Officer, Brad Zaporski. “However, through tightening our belt and successful long term financial planning we will be able to cover our expenses while giving our members room to adjust to market conditions.”

Several times over the past four years, the SMPA Board of Directors has taken advantage of opportunities to defer revenue. This practice, a rate-stabilization tool, will make up for any losses SMPA may realize next year.

A temporary measure, the deferred revenue mechanism will help SMPA bridge a gap between the current rate environment and a yet-undefined future state. Currently, a number of rulings to affect the future relationship between SMPA and its current wholesale power provider, Tri-State Generation and Transmission (Tri-State) are under deliberation at the Federal Energy Regulatory Commission (FERC). “While questions remain about the future of our power supply,” stated Zaporski, “…one truth is becoming more and more evident: the timing of electrical power use will be one of our most powerful money-saving tools as we move forward.”

To help draw member attention to this fact, SMPA has launched an information campaign called “Timing Matters.” Part of the movement can be read on your power bill. The hours of 4 PM to 9 PM have been identified as the system “Peak.” New line items, on the bill indicate “On-peak” and “Off-peak” power use, and members can now see when their account used the most energy within the billing period. This information, combined with the announced metric that “On-peak” power costs the cooperative 4X as much as power used at other times, can help raise awareness of the challenge and of the opportunity that it presents.

“The challenges we face are real,” summarized Zaporski. “However, your democratically-elected Board of Directors has been and will continue to be vigilant and responsive.”

The SMPA Board of Directors will consider the proposed access charge increase at their October Board Meeting on Tuesday, October 24th at 9 AM. The meeting will be held virtually and in the Board Room at 170 W. 10th Ave. in Nucla. Members are invited to attend in-person or as a Zoom participant to provide comment at the beginning of the meeting before the Board considers the proposal.  Members may also submit written comment to rates@smpa.com.