SMECO files to further reduce charges
Distribution rate not decreased since 1980s
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.