SMECO files to fur­ther re­duce charges

Dis­tri­bu­tion rate not de­creased since 1980s

Maryland Independent - - Front Page - By JA­SON BAB­COCK jbab­cock@somd­news.com

The cost of elec­tric­ity and the cost to de­liver that power are set to go down in South­ern Mary­land this month and in the win­ter.

In ad­di­tion to rate re­duc­tion ef­fec­tive this month, the South­ern Mary­land Elec­tric Co­op­er­a­tive has also filed to re­duce its dis­tri­bu­tion ser­vice charges. SMECO ex­pects the lower rates to save more than $1.85 mil­lion a year. If ap­proved by the Mary­land Pub­lic Ser­vice Com­mis­sion, the new rates would go into ef­fect in Fe­bru­ary 2018.

“We’re very pleased to be fil­ing for this re­duc­tion,” Austin J. Slater, pres­i­dent and chief ex­ec­u­tive of­fi­cer of SMECO, said in an email this week. Slater was an ac­coun­tant with SMECO the last time the co­op­er­a­tive filed to re­duce its dis­tri­bu­tion charges in the late 1980s. “Our mis­sion is to pro­vide safe, re­li­able elec­tric ser­vice at the low­est pos­si­ble price,” he said. “This fil­ing is con­sis­tent with that mis­sion.”

The lower rates are the re-

sult of a re­dis­tri­bu­tion of trans­mis­sion costs and a smaller work­force, ve­hi­cle pool and con­sol­i­dated of­fices, SMECO said this week.

In Novem­ber 2014, SMECO com­pleted the $108 mil­lion South­ern Mary­land Re­li­a­bil­ity Project, which cre­ated a 230,000volt loop be­tween Calvert and St. Mar y’s County.

“SMECO’s pri­mary ob­jec­tive in in­vest­ing in its trans­mis­sion fa­cil­i­ties is to bet­ter serve our cus­tomers in terms of re­li­a­bil­ity and ca­pac­ity; how­ever, th­ese fa­cil­i­ties will also of­fer ben­e­fits to the en­tire re­gional high-volt­age grid,” Slater said in a state­ment. “Now that other util­i­ties’ cus­tomers will ben­e­fit, they will also share the cost. The costs for trans­mis­sion fa­cil­i­ties through­out a re­gion are paid for by all the cus­tomers within that re­gion, and this shar­ing of costs will re­duce the monthly bill for SMECO’s cus­tomers,” he said.

SMECO al­ready filed to re­duce its base en­ergy charges by 10 per­cent, which went into ef­fect this week. At 6.58 cents per kilo­watt hour, “the base en­ergy charges have not been this low in more than 12 years,” SMECO said.

The new dis­tri­bu­tion rate, cou­pled with the en­ergy charge re­duc­tion will re­duce a res­i­den­tial cus­tomer’s bill by nearly 8 per­cent come this win­ter. A Fe­bru­ary bill for 1,300 kilo­watt hours would be $13.53 less in 2018 than in 2017.

Ahead of fil­ing to re­duce its dis­tri­bu­tion charge, SMECO con­ducted a costof-ser­vice study, look­ing at the co­op­er­a­tive’s ex­penses to serve its 160,000 mem­bers in South­ern Mary­land. The study eval­u­ated new line con­struc­tion, trans­former re­place­ment and un­der­ground ca­ble re­pairs.

SMECO has re­duced costs with a smaller staff, fewer ve­hi­cles and by con­sol­i­dat­ing of­fices. There are 508 SMECO em­ploy­ees now, com­pared to 527 at this time last year, said Tom Den­ni­son, pub­lic af­fairs man­ager for SMECO.

“Over the last few years, SMECO has trimmed its work­force by not fill­ing po­si­tions of some em­ploy­ees who re­tired or sep­a­rated,” he said.

SMECO also re­duced the size of its ve­hi­cle fleet by re­mov­ing its mo­tor pool. There were 391 ve­hi­cles in its fleet in 2015. There are now 368 ve­hi­cles.

“We plan to con­tinue to re­duce our ve­hi­cle and other op­er­a­tional costs through the full im­ple­men­ta­tion of our smart me­ter pro­gram,” Den­ni­son said. “To date, we have in­stalled nearly 110,000 out of our 160,000 me­ter lo­ca­tions.”

SMECO has closed and sold its of­fices in White Plains and in Prince Fred­er­ick and con­sol­i­dated its re­sources to the Hugh­esville cam­pus and Leonard­town of­fice, he said.

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