Co-op rate increase will cost $5.72 month

By Mike Marino
Cibola County Bureau

GRANTS — Increased power costs that had impacted a Continental Divide Electric Co-op’s 12 month forecast by their consultant and over-protected sales of energy has forced a rethinking process on CDEC’s proposed rate adjustment. Consumers now will continue to pay the Purchased Power Cost Adjustment, known as the PPCA component on the customers bill at an adjusted rate of $0.009958.General Manager of CDEC, Richard Shirley made the announcement.

“It’s unfortunate, but given the circumstances, it is the soundest option available to the co-op and our customers.

To wait until next year to begin recovering all these costs would place a tremendous burden on the consumers,” Shirley said.

“These adjustments also enable us to spread over a longer period of time, the 2008 increase in wholesale power costs by Tri-State. Fortunately, we are now in a position to avoid the rate shock that could have resulted from these circumstances had the co-op waited until next year to address things. Residential consumers will pay almost a penny more, per kilowatt-hour of electricity used. For the average customer that is 500 kilowatt hours per month so that means an additional $5.72 per month,” CDEC spokesman, Mac Juarez said. Consumers will see the change reflected in this month’s billing statements..

Earlier in the summer, CDEC had made the announcement that it was looking for a rate adjustment to help level out power costs in an effort to help stabilize winter season heating bills. They projected factors on the PPCA line-item charge of consumer bills, but discovered that they had been under collecting on power-cost revenues by about $700,000. In January 2008 it was expected that there would be a 11.5 percent increase in wholesale power costs by the Tri-State Generation and Transmission Association, and the co-op was not in a position to wait until next year to begin recovery of the power costs. The management and governing board of trustees of CDEC made the decision that it was in the best interest of its consumers to start collecting the revenue shortfall beginning with the October usage.

The current revenue losses had to be explained to the New Mexico Public Regulation Commission along with the oversights in the co-ops analysis of future power costs over the next 12 month period and Tri-State’s pending rate increase.

The bottom line of the nonprofit co-op’s financial bottom line will not benefit from the proposed rate adjustments as they will only cover the rising power costs. The continuation of the adjusted PPCA charge is expected to remain in place through 2008.

Information: 285-6656.