Opinion

Local resident questions ED3 rate increases, fluctuations

Jul 16, 2010

600

Dear Mr. Stacy:

I’ve read the multiple articles regarding ED3’s efforts to control rates and how ED3 is helping the Maricopa community. This month’s bill insert has a Q&A regarding the costs of power. ED3’s entire media message is controlled by ED3. What none of these articles discusses is the varying Cost per KWH, which results in a rate increase that ED3 does NOT discuss. I believe this is dishonest. From the articles and Q&A in the insert, ED3 customers are led to the conclusion that if the PPCA remains constant and they lower their usage, they can lower their bill. This is not the case because of the Cost per KWH fluctuation.

I have been tracking my electrical costs since moving to Maricopa in April 2009. During this time, the monthly Cost per KWH has varied from a low of $0.090000 to a high of $0.1045439. It is lowest during the cooler months and highest during the hottest months. The June 2010 Cost per KWH is higher than for the same period in 2009. Even if my usage had remained the same, my bill would be higher this month than last year because the Cost per KWH is greater this year than last year.

Please explain why the Cost per KWH fluctuates and why ED3 does not discuss this factor. The Q&A in this month’s insert says that the PPCA is the mechanism to pass along actual changes in power costs on a monthly basis. The PPCA printed on my bill has not changed since July 2009. Therefore, I would expect that if my usage was less than or the same from month to month or year-to-year, my bill would remain the same, and it does not.

I am copying the city council as they have told me they are working with ED3 to try and contain the rates. They don’t seem to be asking the right questions and maybe this will help them in their efforts. I am also copying InMaricopa and The Communicator for the same reason.

I am also attaching the spreadsheet I’ve used in doing my analysis. If I’ve made an error in my analysis, I will appreciate your correction as part of your response.

I look forward to your reply and to ED3’s becoming more open and honest with their customers.

Stephanie Palmer, Maricopa

(ED3 General Manager Bill Stacy responded via email):

I am a little unclear about your spreadsheet but I would be happy to have someone from our customer service contact you and explain your bill to you. Since April of 2009, ED3 has had one PPCA (Power Purchase Cost Adjuster) increase of 2.2 % on July of 2009, which set the PPCA at $.02851 per kwh. Since that time we have not had a rate change or PPCA change, and our goal is not to have a rate change in 2010 and hopefully in 2011. We do have a two-tiered rate which steps up in cost compared to the APS (Arizona Public Service) four-tiered rate, which is shown below and can be found on their web page. In the last month the State of Arizona also increased sales tax by 1%.

ED3’s residential rate is tiered:
Energy Charge:
first 500 kwh’s is at $.09
All Additional kwh’s $115

In comparison,
APS’s summer residential tier:
Energy Charge:
May – October Billing Cycles
(Summer)
$0.09671 per kWh for the first 400 kWh, plus
$0.13739 per kWh for the next 400 kWh, plus
$0.16281 per kWh for the next 2200 kWh, plus
$0.17358 per kWh for all additional kWh

November – April Billing Cycles
(Winter)
$0.09397 per kWh

Our board of directors reviews the PPCA quarterly to evaluate our power costs and has not made a change since July of 2009 in the PPCA. Our tiered rates have not changed since December of 2008 but, with a tiered rate, the second tier is more expensive than the first tier, and the more energy you use in the second tier, the more your average cost would go up.