Who Pays for Powerline Extensions?
Compare SMPA utility construction costs policy with Town of Rico's proposed wastewater utility.
Three-phase primary distribution powerline along Argentine Alley between Glasgow and River Streets in Rico, Colorado.
Rico's central station electric service is supplied by San Miguel Power Association (SMPA). "Central Station" means comnnected to the electric power transmission network and to powerplants which generate electric energy for thousands of customers. SMPA is a consumer-owned, not-for-profit electric cooperative association.
Below are excerpts from the San Miguel Power Association "Extension Policy," with comments added.
SMPA Line Extension Policy - new customers
When new powerline construction is needed to serve a new customer, only the new customer pays the construction costs.
4A. When an Applicant requests a New Service or an Upgraded Service, the Applicant shall pay the actual costs of any required line extension and any applicable fees. (Underline added)
Multiple new customers
If more than one new customers request electric service, new powerline construction costs are shared.
4D. If SMPA receives applications for New Service or Upgraded Service that result in a line extension that would be used to serve more than one Applicant prior to start of construction of the line extension, then estimates shall be calculated such that the costs of the line extension are appropriately shared. (Underline added)
After the powerline extension is built and placed in-service, who owns it?
4K. All extensions shall, upon completion and approval by SMPA, become SMPA property except for a facility which is, by agreement with SMPA, owned, operated and maintained by the Consumer.
New construction cost allocation philosophy
Why does SMPA require only those to be served by new powerlines to pay for construction, and not other existing SMPA customers and off-grid electricity users?
1. PURPOSE: The purpose of this policy is to set forth the service and distribution line extension and alteration requirements to be observed by SMPA in a manner which fairly allocates the cost of system growth and minimizes the effect of growth upon rates. (Underline added)
Compare with Town of Rico's sewer/sanitation treatment proposal
The extension cost-allocation philosophy for Town of Rico's proposed sewer and wastewater treatment project is the opposite of San Miguel Power Association's powerline extension policy. The November 2019 ballot question requests citizens' permission to allow Town of Rico to spread the construction sewer/wastewater plant construction cost across both served and unserved citizens, as a property tax increase.