Co-op hears complaints about peak-demand rates

Not a rate increase, officials say

March 27, 2019 in THE KITCHEN SINK | Comments (0)

A 1937 REA poster by artist Lester Beall


The San Luis Valley Rural Electric Cooperative heard complaints from perplexed residents of Crestone-Baca struggling to understand the new rate structure that takes effect on April 1. Despite pleas for a delay of the effective date, the board took no action except to enact a 30-day delay in enforcement of  the use of smart meters by those customers who have refused them in the past.

The smart meters, already installed at most homes, record and transmit the running consumption of electric power, beeping radio frequency waves to Monte Vista.

The new rates will appear first on May bills based on April consumption. The change will cost more for consumers that the co-op decided are not paying their fair share of the non-profit costs of providing electric power.  Targeted are people with solar panels and second-home owners, among others, the raucous meeting disclosed.

The “Dear Member” notice sent on March 12 came as a surprise for the Crestone residents, although the rate change was telegraphed at the end of the monthly column by Chief Executive Loren Howard in the co-op’s February “Newsboy” mailer.

Matie Belle Lakish, former chair of the Baca Grande POA, waved the notice at Howard, protesting that it was incomprehensible. “Why don’t you get somebody who knows how to write?” she said. 

Residential bills right now show a fixed charge plus a calculation of charges per kilowatt power used during the month. The new bills, apparently varying with rate class, will show a fixed charge  plus a kilowatt hour charge, plus a surcharge per kilowatt (not kilowatt hour) for the highest 15-minute spike in demand during the month, regardless of total usage, and for some customers  another surcharge per kilowatt for the highest monthly spike during the hours of 12 noon to 10 p.m. on any day except Sunday.

Some teachers explain the difference between kilowatts and kilowatt hours with the simile of a garden hose. A KW is like the water pressure and a KWh is like the amount of water used. 

Providing electricity requires more available kilowatts the more household appliances are turned on at once. 

So to keep the demand spikes lower, you need to cut down the number of electric things operating at the same time. The co-op’s innovation of off-peak KW “demand” tells you to save money by using more power between 10 p.m. and 12 noon the next day (or on Sundays).

Daniel Frelka of Crestone protested what he called “the life-style change you are imposing on everybody. I don’t want to roast a chicken and find it costs me 50 bucks.”

Wade Lockhart of Crestone, who is running for the co-op board, pointed out this affects the bathroom showering by those who have on-demand water heaters. Conventional tank heaters can heat up during the night, providing hot water any time at lower costs than the more efficient instant heaters.

Lockhart also engaged Loren Howard in a conversation about people who are frequently away from home in Crestone, including second-home owners. They pay little more than the fixed charge when they use little power. Under the new rate structure they would pay for the highest spikes no matter how much they use. 

Lori Nagel of Crestone found this incredible. “Why not just pay for what we use?” she asked Howard, who responded it was complicated, involving costs of always being prepared for peaks. 

Nagel said, “This is just a fancy way to increase rates.” Howard responded this is not a rate increase, and board members chimed in on this theme. Mark Rierson of rural Center explained it is an equalization because some consumers (called members) are subsidizing others. If the revenue from residential customers is now $1 million a year, it will still be $1 million after the rate change, he said.

Rierson added, “Nothing lasts forever. Things change over time. The industry as a whole is changing. Savings are not as great as ten years ago.”
The co-op and 43 others in the West buy wholesale from Tri-State Generation and Transmission, which relies on coal-fired power plants such as the 100-megawatt one at Nucla, CO, due to be closed down in 2022 and a 472-megawatt unit at Craig, CO, closing in 2025. A quarter of Tri-State power sources are described as “sustainable” such as solar photo-voltaic generation.

Board member Scott Wolfe of Alamosa said, “We did this as a business decision, helping our business run better.” He told Nagel not to “panic,” that it was not a rate increase but a correction. “Some people under-pay, some over-pay.”

Board chair Cole Wakasugi of Blanca said, “Our biggest responsibility is to protect our co-op.”

There was no response on the issue of smart meters, on the minds of most of the outspeaking Crestonians. Several cited studies about the adverse effects of rf radiation. Several told personal stories of being stricken upon contact with smart meters. 

Two years ago a number of Crestonians opted out of smart metering, choosing to pay more for their traditional meters that have to be read visually.  But this op-out agreement is now discarded because smart meters are essential for the new rate structure. Lars Skogen of Crestone said, “Our opt-out does have legal weight,” implying that the abrogation could be challenged.

Russel Preister and others called smart meters an invasion of privacy because they might make it possible for somebody to track the behavior of residents, such as when they watch television or cook.

Most protested the short notice. Nagel asked, “What was the urgency?” Frel said it left no time to respond, “Just: boom!” 

Board member Wolfe pointed to the February Newsboy as early notice. But the chief executive’s column did say, “An adequate explanation of how this three-part rate will work takes more than the space for this month’s Newsboy article, so stay tuned for further articles on this change in rates.” There have been no further articles.

(A personal disclosure: In 2004 I designed ETS heaters into my Baca home, which was about to be built. The system sets up off-peak electrical heating of heavy firebricks in the units, which release heat by blowers as needed, night and day. The same for the water heater. The deal let the co-op use its excess capacity — the spinning Tri-State generators — at night and at certain times during the day. When there was a wide difference between off-peak and on-peak rates early on, the savings were substantial as compared with traditional electric baseboard heaters, but in recent years the spread in rates has become narrower, and the co-op has stopped providing maintenance of ETS units, although it stocks parts such as heating coils for private electricians to purchase for repairs. Under the new rate structure ETS heating might be comparable to wise use of baseboard heating. We shall see.)

 This article has been revised to correct an error in the effective date of the rate change.