SMECO Receives Approval to Reduce Distribution Rates

December 29, 2017

Cost of transmission system to be shared across region

Southern Maryland Electric Cooperative (SMECO) received approval from the Maryland Public Service Commission (PSC) on December 28, 2017, to reduce its Distribution Service charges for customers. The lower rates are the result of a redistribution of SMECO’s transmission costs, which will save SMECO customers $10 million per year. The new rates are scheduled to go into effect in January 2018.

The distribution rate will be an average of six percent lower for all SMECO customer classes. The new distribution rate, along with lower energy rates that went into effect in August, will result in an overall reduction of about four percent on a residential bill compared to a year ago. For January 2018, the residential distribution rate will be $0.043 per kilowatt-hour (kWh) and the base energy charge is $0.072 per kWh. An average monthly residential bill for 1,300 kWh will be more than $7 less than it was in January 2017.

“SMECO’s energy rates are as low as they were 12 years ago, and that’s good news for all of our customer-members,” said Austin J. Slater, Jr., SMECO president and CEO. “When reduced energy costs are bolstered by reduced rates on other parts of the bill, customers will be able to save even more.”

SMECO’s cost for investing in high-voltage facilities is being reduced because the costs for transmission facilities throughout a region are paid for by all the customers within that region. “SMECO was registered as a transmission owner in January 2017. Since the entire region benefits from SMECO’s high-voltage facilities, the cost of those facilities will be shared by customers throughout the region. In addition, SMECO has taken cost-cutting initiatives, such as reducing staff, decreasing the number of vehicles in its fleet, and consolidating offices,” Slater explained. “As a result, our customer-members will have a lower monthly bill.”