Changing how Truth or Consequences calculates the electric bills for the city-owned utility was put on the agenda by City Commissioner George Szigeti, a member of the Public Utility Advisory Board before being appointed to take over Steve Green’s city-commission seat nearly a year ago.
Szigeti said he presented a different formula to the City Commission as a PUAB member a year ago that included lots of charts and numbers that has now been simplified.
The City’s contract with Sierra Electric Cooperative allows for “two types of automatic increases” to customers’ bills, Szigeti said. The City lumps both into the “energy-cost adjustment,” which used to be called the “pass-through” on the customers’ bills.
Sierra Electric Coop sells the city 67 percent of the power it uses and adjusts its wholesale rate every month. The City could pass along that change, up or down, but hasn’t since 2013, Szigeti said, because the software the city uses makes it too difficult to adapt once a month.
The second cost the city could change and adjust relates to the City’s electric department trucks, with fuel costs varying. It too has not been adjusted since 2013, Szigeti said.
The two adjustable costs, lumped together, have been .0414 cents per kilowatt hour for years, passed along to the customer in addition to the City’s .1314 cents per kilowatt hour rate and $8 service charge for residential customers, with 8.5-percent tax on top. Businesses pay more.
The city, as before, will take Sierra Electric’s varying monthly rate, adding it to its other wholesale costs. Western Area Power Administration provides about 26 percent of the city’s electric power, with wheeling charges from TriState Electric added in, and SSA#4, the solar farm, provides about 7 percent of the City’s electric power. The City will now take the average wholesale cost, calculating it afresh twice a year.
Taken all together, the city’s wholesale average cost for a kilowatt hour has been about 7 cents for years.
In the new formula, the city will subtract 3 cents from the average wholesale cost for September through May and will make that the “energy-cost adjustment” rate for the winter season. The cost for the pass through will therefore go from .0414 cents to about .04 cents this winter. It will do a second calculation for June through August, the summer wholesale costs generally higher than winter costs.
Szigeti said he chose 3 cents because it kept the energy-cost adjustment rate close to the old rate and he didn’t want big fluctuations in revenue disrupting the City’s electric utility.
PUAB Member Ron Pacourek has been pushing the City Commission to regularly calculate the energy cost adjustment, “since it hasn’t been done in so long.” Asked if the minus 3 cents “formula” is based on real truck fuel or other costs, Pacourek said, “I don’t know.”
Szigeti said the primary change is calculating the energy-adjustment cost twice a year, setting the City up to charge more or less if fuel charges go way up or down or a big storm knocks out wholesalers’ power.
City Commissioners agreed it didn’t require a vote, because calculating the cost was always allowed in the Sierra Electric Cooperative contract.