A plan by the Sangre de Cristo Electric Association to squeeze more money from absent property owners is sparking a revolt among the cooperative’s members.
The electric co-op wants to increase its monthly service charge while cutting the cost of power for customers who use the most electricity. As Colorado’s mountain communities struggle with the rippling impacts of a flood of new residents buying homes and spiking the cost of real estate, Sangre de Cristo’s proposal reflects a new strategy for making newcomers pay more to offset those impacts. But some members argue the plan punishes people who have invested in renewable energy and efficiency to reduce their energy consumption.
“This is a vendetta against people with rooftop solar,” Chaffee County resident Susan Greiner said.
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CEO Paul Erickson says the restructuring plan proposed by the Buena Vista-based rural electric co-op helps “cost causers become cost payers” and that the protest over the proposal, which does not raise revenue for the co-op but reshuffles who pays what, “has all been blown way out of proportion by folks who have special interests.”
Last fall the Sangre de Cristo Electric Association, which offers power to residents across about 3,700 square miles in Chaffee, Custer, Fremont and Lake counties, proposed a plan to change how it charges to deliver electricity to more than 13,000 users. About 90% of those customers are in homes and 40% of those residences are second homes that don’t use much electricity.
The plan calls for owners who use less than 590 kilowatt hours a month to pay more, while users who consume more than that will pay less. The fixed rate for electrical service will climb to $46.15 a month from $31.83, while the charge per kilowatt hour of electricity decreases: a discount of 1% for consumers who use only a bit more than the average 590 kilowatt hours a month, but heavy electrical users can see discounts up to 5.4%. The $46.15 monthly service charge ranks as the highest among the 24 large and small electrical co-ops in Colorado. The association also wants to switch to charges based on the time of day, which increases costs for electricity used during peak hours after 5 p.m.
The idea is that owners of second homes will pay more for the infrastructure that supplies electricity to their properties while the full-time residents who use more power will pay a smaller amount per kilowatt hour.
But the proposal lumps in about 500 association members with rooftop solar arrays in with the owners who don’t use much electricity. And it punishes people who try to conserve energy, Greiner said.
“This plan will make rooftop solar people’s bills at least double if not triple,” said Greiner. “And low energy people, including people with low or fixed incomes, will be paying about $50 a month before they even turn on a light. We already have an affordable housing crisis here so making it harder on people who live and work here does not make any sense.”
The rural nonprofit cooperative has about seven members for every mile of power line, “in the most rugged terrain on the planet with extremely high operational costs,” said Erickson.
“So we have the highest electrical costs in the state and we have among the lowest consumption in the state,” he said. “So how can we keep the lights on? We need this new model of collecting all our costs up front, which we think is fair and equitable.”
The new rate model mirrors moves by other nonprofit energy providers as they shift away from heavy reliance on revenue generated by selling kilowatt hours of electricity in favor of larger fixed charges, which don’t fluctuate with increased or decreased use.
It’s not unlike payment plans for internet or cable television, Erickson said.
“Turn on the switch and you’ve got it, but you are going to pay for it even if you are not using it,” Erickson said. “So the charge for energy is lower, but the access charge is higher.”
The plan is not sitting well with association members who have solar panels on their homes. (An online petition objecting to the rate changes has collected more than 650 signatures.) They push energy back onto the grid during the day, but since their use falls below 590 kilowatt hours a month, they will pay more for the power they use at night. That’s on top of an increased fixed fee for service.
There’s a preconception out there that people with solar are rich, Greiner said.
“There are lots of us working people who put solar on our homes and businesses in good faith because it’s the right thing to do,” she said. “And those people are upset because this is really going to hurt them.”
The group is arguing that the new rate plan violates Colorado’s 2008 net metering law that requires cooperative electric associations to credit solar-paneled homeowners with 1 kilowatt hour for every kilowatt hour they add to the grid. The legislation was designed as an incentive for homeowners considering solar panels.
Charging users with solar arrays more for electricity at night violates that rule, said Tom Plant, the former director of the Colorado Energy Office who now works with Colorado State University’s Center for a New Energy Economy. He lives in Buena Vista.
Many states and rural electrical providers are developing similar policies designed to promote community or regional solar generation but discourage individual solar arrays, Plant said.
“The difference here in Colorado is that we have a net metering statute that specifically says co-ops cannot do that,” said Plant, who helped write the 2008 legislation.
He said the Sangre de Cristo association’s rate plan for members with solar panels violate the state law.
“If this goes forward you will lose the legal battle and cost the membership unnecessary expenses,” he wrote in a letter to the co-op’s board last week.
Plant said his fight against the Sangre de Cristo plan is focused on impacts to his community’s lower-income residents.
“The idea of investing in energy efficiency is that it is going to reduce your bill but when you have so much of your rate in a fixed charge, you drastically reduce the impetus to invest in that energy efficiency,” Plant said. “There are other ways to design rates that can address concerns over second-home owners that don’t directly impact low-income residents.”
A grassroots campaign of association members is pushing the nonprofit’s board to deny the restructuring. After about 40 members spoke in opposition to the changes at a meeting in January, the board, which has already approved the new rate plan, delayed implementation until April.
Greiner said the board’s meeting on Feb. 23 marks “our last chance to get them to back off and find a solution that works for everybody.”
“The next step will be a complaint with the Public Utilities Commission,” she said.