March 29, 2024

SMECO Files to Reduce Energy Charges

smeco logo
 Posted for SMECO

Southern Maryland Electric Cooperative (SMECO) has filed an application with the Maryland Public Service Commission (PSC) to reduce energy charges on its residential customers by more than 12 percent.

SMECO is filing to reduce the residential winter energy charge from 9.25 cents per kilowatt-hour (kWh) to 8.13 cents per kWh. Winter energy charges appear on bills rendered October through April. Residential energy charges for summer will decrease from 8.61 cents per kWh to 7.53 cents per kWh, a reduction of 12.5 percent. The filing was submitted February 27, and, if approved by the PSC, the reduced charge will appear on customer-members’ May 2015 bills.

Austin J. Slater, Jr., SMECO president and CEO, explained, “The cost of energy makes up the largest portion of the monthly bill. So this energy rate decrease—which affects residential customers, commercial customers, schools, government and sports facilities, and even street lights—will deliver substantial savings to customers. And this rate reduction is significant. The average residential customer with monthly usage of 1,300 kWh this summer will save about $17 each month as compared to last summer.

Mr. Slater added, “As a cooperative, we are happy to provide reduced energy rates to our customer-members, because SMECO does not make a profit on energy charges. The value of the cooperative business model, in which savings are passed on to customers, distinguishes us from other energy companies.”

SMECO uses a portfolio approach to purchasing power, aggregating power supply agreements with a variety of suppliers to purchase energy for its base load and peak load. SMECO’s residential energy rates peaked in the summer of 2009 at 12.53 cents per kWh. Prices for energy peaked again in March 2014 throughout the northeast because of the dramatic drop in temperatures which resulted in an increased use of electricity.

“The co-op’s power portfolio produces stable energy rates and helps to save money for customer-members overall,” Mr. Slater said. “Natural gas prices are down about 34 percent from last year, which helps to lower the cost of power supply for SMECO. We project our cost for the energy portion of wholesale power to be more than 17 percent lower than last year, and these savings are passed on to our customer-members.”

SMECO’s Standard Offer Service (SOS) rate is made up of the energy charge and the Power Cost Adjustment (PCA). On SMECO’s monthly electric bills, lower power supply costs have been reflected in the PCA, which has been a credit every month since September 2014. With the PCA credit, the SOS rate for February was, in effect, reduced from 9.25 cents per kWh to 8.60 cents per kWh. The total SOS rate in May will be the combination of the new reduced energy charge and the PCA, which changes monthly.

SMECO is a customer-owned electric cooperative providing electricity to more than 158,000 services in southern Prince George’s County, and in Charles County, St. Mary’s County, and all but the northeast portion of Calvert County. Co-ops are distinctly different from investor-owned utilities because co-ops are owned by their customers, and these members elect the men and women who serve on the Board of Directors.

Co-ops also issue capital credits to their members. What are capital credits? They are the member’s share of the co-op’s margins, based on how much electricity the member purchased and the rate at which the account was billed. SMECO’s margins—revenue less expenses—are used as working capital for new construction and system improvements. When SMECO’s Board of Directors determines that a percentage of the capital credits can be distributed to members through a general refund, capital credits will be issued by check or credited to members’ electric bills.

Follow SMECO on Facebook  and on Twitter. The SMECO 24/7 mobile app is available here.

Comments
One Response to “SMECO Files to Reduce Energy Charges”
  1. Carolyn Egeli says:

    SMECO is one of the best deals around. We should be so glad we have a cooperative. They do a wonderful job. But since it belongs to all of us, we should be pushing more for renewables then we are now. Maybe we can support individually owned solar much more or SMECO could contact Jeremy Rifkin who wrote The Third Industrial Revolution and THe Zero Marginal Cost Society. He is at the Wharton School of Business. The European Union signed on to his program for energy years ago. It is the main reason Europe is so far ahead of us in energy. Sweden is on the cutting edge of things. So much could be done if our minds are put to it.

Leave A Comment