City places electric rate study online
By CHUCK CLEMENT, Staff Reporter
Staff with the Madison Finance Office have placed information online at the city website related to a rate study performed for the municipal Electric Department, including rate charts for residential and small commercial customers.|
The rate-study information was placed on the cityofmadisonsd.com website on Thursday and a link to the information is available at the city's homepage.
Electric utility customers can read the draft recommendations from DGR Engineering as they were received and discussed at the Sept. 16 city commission meeting.
The information provided by DGR engineers included an overview provided in an executive summary, special analyses of load management credits and demand-based billing, and rate comparison charts for residential and small commercial customers.
During the last city commission meeting, Commissioner Scott Delzer asked whether city personnel could place the rate-study information online. Delzer also recommended that they should place the study on the website to inform residents about the extent of the proposed changes.
"We need the citizens to be aware of what's happening here," Delzer said.
Delzer added that he didn't want "...people upset because they didn't know what was coming."
The rate study's executive summary opens with its objectives that included:
-- Estimating future cash needs of the electric department. -- Estimating its future operating results.
-- Allocating the service costs to different customer classes.
-- Developing proposed electric rates.
The engineers also reviewed Madison's load management program, in which customers -- basically residential customers -- allow the city to cycle on and off their water heaters, air-conditioners, and certain types of electric heaters. Madison customers can voluntarily sign up for the program to assist the city in avoiding peak-use periods on extremely hot and cold days. The need to purchase extra electricity during peak-use periods can dramatically increase the charges that Madison has to pay its electricity wholesalers.
When speaking about the peak-use charges, Delzer said that Madison could see an extra $30,000 in electricity costs from its wholesalers when the municipal electric department experiences a new peak.
The DGR engineers calculated that the city saved about $273,000 in electricity-supply costs during 2012 while returning $93,000 in load-management credits to customers for their participation.
The engineers reviewed whether Madison should increase its credits to encourage more participation. After comparing the city's credits to those offered by other providers such as Sioux Valley Energy and Otter Tail Power Company, the engineers reported "...the City credits appear to be in the general range of what is available."
DGR also studied the possibility of demand-based billing for its largest electricity customers. The engineers noted that Madison officials have only recently started collecting time-of-use information for some of its customers. They recommended that the city collect more information about time-of-use electricity loads and develop a pilot program for its largest customers.
The DGR recommendation for demand-based billing ended with, "If it is successful and widely accepted, it could be rolled out to other rate classes as appropriate."
Persons wanting more information about the flat-rate study can contact the finance office at 256-7504 with questions or comments.
©Madison Daily Leader 2013
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