We are in the final month of the year and work is well under way to determine rates and budgets for next year. This work includes a deep dive into the cost of each customer class and determining what it will take to keep our electric system safe, reliable, and affordable. I wanted to explain the process SCPPD management and Board of Directors use to set rates for our customers.
The process of a rate study includes many factors.
Expenses: We kick this process off with an in-depth analysis of each rate class
called a Cost-of-Service Study (COS). This study includes fixed and variable costs to
determine the exact cost to serve each customer of each rate class. Once we know
the cost to serve each customer class, we then must cover these costs with the rates.
Revenue: When we look at the revenue that we expect to collect from each rate class, there are several variables we need to consider. Weather is the most unpredictable variable. Hot and cold temperatures impact sales for residential customers, while wet and dry growing conditions affect the irrigation and drying bin sales. While no one can predict the weather, we must be financially prepared for both. Extreme storms will also increase the costs we need to cover. We must determine a reasonable reserve to meet all those challenges.
Other Factors: Considerations must be taken for Power Cost Adjustments (PCA) from our wholesale provider, interest rates on debt and investments, inflation, depreciation of system, and level of maintenance as we develop rates. Recently we have had issues with replacing our fleet on schedule as well as significant price increases. The unpredictable weather can significantly impact our budget as well.
In conclusion, we look to set rates for the year that will allow us to continue to deliver safe, reliable, and affordable electricity to all customers. We also look to keep rates stable and make gradual adjustments rather than constant changes year after year. Rate setting is not a perfect science and it is a very complex process. I applaud our Board of Directors, management, and employees for being good stewards of the customers’ money. When making decisions on rates and budgets, we carefully consider the impact to the District. We must consider each rate and ultimately, each customer. We again look forward to 2023 with no rate increases and continue to pass through a PCA credit to most customers. We are proud to serve our customers and wish you all a Merry Christmas and Happy New Year!
Chad Waldow: General Manager, CEO
Portable generators can be a great way to keep your family warm and comfortable while you are out of power. However, they can also be dangerous. Fuel your knowledge before powering up a generator
✓ Prepare: Install battery operated carbon monoxide (CO) alarms throughout your home; ensure they are working properly.
✓ Position: Place a portable generator at least 20 feet from windows and doors; do not use one in a garage or carport.
✓ Read:Carefully review and then follow all manufacturer’s instructions.
✓ Protect: If it is wet outside, keep it dry by placing it on a tarp. Position it under a portable canopy (not a carport).
✓ Refuel Safely: Turn off your portable generator and let it cool down before refueling.
✓ Inspect and maintain: Inspect a portable generator before each use and make sure it is properly maintained.
A portable generator can be useful during an outage; however, use one correctly to prevent CO poisoning and to stay safe.
Empower children to stay safe outdoors, around electric utility equipment.
According to the National Institute of Health, electricity causes approximately 1,000 deaths and 30,000 injuries in the US each year, 20% of which occur in children. Empower your family with electrical safety knowledge that can potentially save their lives. Always remember that electricity is everywhere, even when playing outdoors, away from screens and other plug-in devices.
Substations and Padmount transformers may spark a child’s imagination. It may appear to be a fun place to play, but these are filled with electrical equipment that could cause harm or even death to someone who is not trained to handle them. Stay Away!
The SCPPD office will be closed December 26th, 2022 for the Christmas holiday.
We wish you a warm holiday and thank you for letting us serve you.