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SEC changes the way you’re billed for electricity

SEC changes the way you’re billed for electricity

Article was added on Saturday, October 10, 2015

I'm proud to have come to a cooperative where the management and board had the forethought to start moving the recovery of our fixed costs from the kWh-used or energy portion of the bill to the basic facilities charge. 

Not long ago, Santee Electric Cooperative conducted a study to look at how our rates affect the revenue of the cooperative compared to operations costs. The study determined that the best approach is to increase the basic facilities charge while decreasing the energy charge - working toward removing the tie between fixed COSTS and the kWh-used or energy CHARGE.

In April, the $15 basic facilities charge was listed separately for the first time on your bill. This was not an additional charge; the two components of your bill were simply separated. These two components are the base facilities charge (which is a fixed component) and the kWh-used energy charge (a variable component).

The intent of the basic facilities charge is to cover the cost Santee Electric Co-op incurs to build and maintain the system that carries electricity to your home or place of business. Even if we never move a single kilowatt-hour (kWh) over the wires, we still face these expenses in keeping the facilities in place to carry that electricity.

SEC, along with many other electric cooperatives around the state, previously charged a very low facility charge. In addition the first block of electricity used was one price and the price decreased with every extra block of power used. Thus, the more you used, the less expensive the electricity became. This does not fit with our conservation efforts. We want our members to use LESS energy, and we go to great lengths to promote conservation, education and energy efficiency. 

The best rate is when our charges reflect our actual costs. Therefore, on October 1st the facilities charge changed to $18. In order to make this change revenue neutral, the $3 is being offset by a $3 decrease in the energy charge on the average residential bill.

Let me give you an example. For a $200 power bill, our previous CHARGES included a $15 basic facilities charge, and the other $185 was electricity or kWh used. However, when considering the cooperative's COSTS, approximately $50 of that bill is tied to fixed costs, and the other $150 varies with your energy or kWh used. This change to an $18 facilities charge (and corresponding decrease to $182 for energy) is a step toward making the charges reflect the costs. 

This change will allow Santee Electric Cooperative to account for costs more appropriately and make sure our ability to fund operation, maintenance and repair expenses remains strong. This change helps us allocate the cost of power distribution more accurately among all our members.

Robert G. Ardis III
President and Chief Executive Officer


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