The La Plata Electric Association board voted this week to increase its rates in April to maintain and improve its infrastructure and prepare the grid for the future.
The new charge will be levied on each kilowatt of power used from 4 to 9 p.m. when electrical use is highest and the cost of buying power from Tri-State Generation and Transmission, LPEA’s power supplier, peaks.
LPEA currently charges a $21.50 base rate and about 12 cents per kilowatt hour and those charges will stay in place, said Dan Harms, manager of rates, technology and energy policy at LPEA. The new charge during peak hours will be $1.50 per kilowatt.
The charge will increase the average monthly residential bill from $103.14 to $107.94 – or $4.80 per month, Harms said.
The vote to raise rates was unanimous, said Davin Montoya, LPEA board member. Montoya opposed a vote in December to raise revenues and still questions LPEA’s spending.
However, Montoya said he approved of how LPEA plans to raise rates because it could encourage residents to conserve power when demand is highest and Tri-State charges the most for power, he said.
“I think everybody feels like if we can shave the peak, it’s a good thing,” he said.
LPEA decided to add a new charge during peak hours to give customers some control over their bills, Harms said.
“People hate seeing an increase in the base rate because there is nothing they can do about it,” he said.
LPEA also didn’t want to raise the kilowatt per hour charge because it could discourage customers from purchasing electric vehicles. Under the approved rate structure, customers can program their cars to charge during off-peak hours. Customers can also program other household appliances, such as water heaters and dishwashers, to run at off-peak times.
The rate increase is expected to generate $3 million in new revenue for LPEA that will be used to help update aging infrastructure, Harms said. For example, LPEA needs to update a 40-year-old underground cable and the equipment used to isolate problem areas of the grid.
LPEA also plans to use the funds to update its grid with new equipment that could help control the flow of electricity from batteries and renewable sources, such as wind and solar, he said.
Currently, the grid is mostly set up for electricity to flow to customers from a central source.