With the new year, DMEA's residential customers will see electric rate increases of between 9 percent and more than 100 percent from new charges adopted by the utility on Nov. 26.
Energy savers who have used the low "time of use" rate structure will see their basic off-peak charge surge from 3.73 cents per kWh to 8 cents per kWh — a more than 100 percent increase.
The basic residential rate will increase from 9.4 cents per kWh to 10.3 cents per kWh — a 9 percent increase.
At a public hearing on the new rates, DMEA general manager Dan McClendon said the increase to local ratepayers is necessary because of increases in costs from wholesale power supplier Tri-State Generation and Transmission. He said in past years, DMEA has held the line and not passed its higher wholesale costs on to consumers. The utility has absorbed $7.5 million in purchased power costs over five years, McClendon said at the October hearing.
According to a DMEA advisory issued following the rate increase decision, "Since 2008, DMEA has deferred operational costs in order to absorb losses exceeding $5 million."
While the increases from Tri-State amount to about 1.5 percent on average for 2014, in 2013 and 2012 the wholesale increases were just under 5 percent each year.
"This (2014) is not a DMEA increase," McClendon said. "We are trying to pick up some of what we have lost [in the past five years.]"
Tri-State's latest increase made it imperative that DMEA follow suit this time, McClendon explained at the October rate hearing. For example, a newly structured rate regimen from Tri-State two years ago resulted in DMEA losing money on the time-of-use rates it has been charging some customers.
While McClendon said DMEA has cut costs from internal operations as much as it is able to, others at the October public hearing disagreed. They criticized DMEA for not taking a stronger stand against Tri-State's rate increases.
DMEA's own elected representative on the 44-member Tri-State board of directors was called out during that session for voting in favor of the latest Tri-State wholesale increase.
A criticism of DMEA's internal cost structure was aimed at its "bloated" employee
pension plan and "out of control" employee benefits package. Former DMEA director Mark Eckhart added that the utility's ratepayers "pay every nickel of it."
Asked afterward about Eckhart's remarks, DMEA board president Nancy Hovde said the issue is very complex, that changes are taking place in the industry, and that DMEA is trying to make changes also.blog comments powered by Disqus