San Miguel Power Association has proposed to hike its base monthly access charge for the vast majority of its customers from $33 to $42, marking the fifth straight year the power provider has sought a rate increase.
The 27% increase to the access charge for single-phase users – a category that includes over 90% of customers – was tentatively approved by the co-op’s board at its meeting in Nucla Tuesday, with final approval scheduled for the board’s Nov. 17 meeting.
The utility is also proposing to increase its rate per kilowatt hour for peak usage times from 25 cents to 31 cents, an increase of 24%. The rate for non-peak hours would likewise increase from 11 cents to 11.3 cents.
Member Services Manager Wiley Freeman said the increases are needed to support capital improvements on SMPA’s grid without taking on additional debt, and to bring in more cash to cover its fixed costs of about $56 per customer. Staff for the utility has long argued that it needs to boost the percentage of fixed costs SMPA recovers from its users.
The rate adjustment, Freeman added, will allow SMPA to recover 75% of those costs, compared to 59% before.
“It’s not quite all the way there yet,” said Freeman. “But again, we do not want to necessarily look at math only. We want to avoid abrupt changes.”
Among the increased expenses for SMPA in its 2027 budget is a $350,000 – or 31% – bump in fire mitigation spending, which will include additional crew work and software updates for the grid.
If approved at the co-op’s board meeting next month, the rate increase to the access charge would result in a doubling of that fee since 2021. SMPA is also proposing to increase access charges for high demand and three-phase customers, the latter of which includes industrial and commercial users.
“I’m not crazy about raising our access charge by $9 a month,” said board member Rube Felicelli. “I expressed at the budget meeting [that] I’d like to see it under $40. But the reality is, it’s something we have to do in terms of keeping the lights on.”
Freeman said the rate hikes, if approved, would increase most customers’ bills by $10 to $15 per month. And he added that SMPA’s monthly access charges will remain at or below the level of most of its peer providers in the region, with the exception of La Plata Electric Association.
Members of the co-op can submit comments on the proposed rate increase to comments@smpa.com before the Nov. 17 board meeting, or they can comment publicly during the board meeting.
