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Working towards a fairer way to share the costs of powering the SLV

By Loren Howard

As a not-for-profit consumer-owned electric cooperative, San Luis Valley REC keeps its focus on providing affordable and reliable power to homes, farms, ranches and other small businesses across the Valley.
REC’s interest is in supporting the best interests of the Valley.  That’s why the coop exists and that’s the priority.
Earlier this year the REC implemented changes to the rate structure that have prompted some discussion and a few complaints.
The rate structure, based on a comprehensive study, was designed to spread costs more fairly across all 7,500 members, based on when and how they use power. It wasn’t an overall rate increase; the REC expects to collect roughly the same amount of total revenue this year as in 2018.
The goal was to charge member consumers more equitably to cover the costs they place on the electric system. For some consumers, that might mean an increase; for others, it would be a decrease.
Reliably available electricity relies on a complicated system of power generation, transmission and distribution – what’s known as the electric grid.
The electric grid must have enough capacity to meet the highest spikes of demand when a lot of people use a lot of power at the same time. Spreading out electricity use and avoiding big spikes reduces the demands on – and overall costs of maintaining – the power grid.
Demand pricing, which the REC introduced to residential consumers this year, is designed to charge more to those whose electricity usage patterns cause spikes in demand. This more fairly shares the costs that these spikes in demand place on the grid, and it can encourage people to adjust their electricity usage patterns to reduce overall costs – and that benefits everyone.
For example, instead of running your washing machine and electric range at the same time, you can stagger them, so your power usage is spread out more evenly over time.
Demand charges have been around a long time for REC irrigation and commercial members. The change was that the rates were introduced to residential consumers.
Although the new residential demand rates were designed to be more equitable, two complaints were filed with the Colorado Public Utilities Commission asserting this new rate was “unjust and unreasonable.”
Subsequent mediation has resulted in a replacement demand rate for Schedules A and A-TOD, which are mainly residential rates, effective Dec. 1 through March 31, 2021.
The revised demand rate will substantially reduce the impact of the demand rate, meaning it will moderate the higher costs for residents who have significant spikes in their electricity use.  
In the meantime, the REC will further study the issue and engage stakeholders in a discussion of how to most fairly apportion electric rates, which is the ultimate goal.
Staff remains available to speak with members regarding the rates, explain the different types of charges, and suggest ways to keep costs down.
For more information, please call 719-852-3538 or email

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