Vol73-1 January 2023

Rate adjustment filed with Public Service Commission

SMECO filed a request in December with the Maryland Public Service Commission (PSC) to increase its distribution rates (also called the Distribution Charge on your bill) and restructure the rate classes impacting commercial accounts. This is the first request for an increase to the charge for energy distribution in seven years. If approved, the rates are expected to take effect
no later than July 2023.

Customer bills have two main components, the Standard Offer Service (SOS) and the Distribution Charge. SMECO’s Distribution Charge covers the cost of the cooperative’s electric facilities and business operations. For residential customers, SMECO’s request would increase the Distribution Charge less than 7/10 of a cent—less than a penny—from 4.30 cents per kilowatt-hour (kWh) to 4.955 cents per kWh. If approved, the adjustment will result in a monthly increase of less than $8 for a member who uses around 1,200 kWh per month—less than five percent of the overall annual electric bill, though figures will vary depending on individual usage.

When you belong to a cooperative, every penny you spend on your electric bill benefits you. What you pay for power—the SOS rate—goes directly to paying for power. SMECO makes no profit on the cost of electricity.

The Facilities Charge and the Distribution Charge on your bill reflect the investment SMECO makes to provide reliable service to its members, covering the cost of lines, poles, transformers, facilities, vehicles, and personnel.

We know customers are sensitive to cost increases and SMECO works hard to control our Distribution Charge while also implementing infrastructure that provides our members with greater control over their bills, more flexibility in how our members do business with the cooperative, and continued reliable service. SMECO has also proposed a redesign of the structure of commercial rate classes.

The modest increase requested for the Distribution Charge will enable us to continue to provide the level of reliability customers expect and to maintain SMECO’s financial integrity.

Rate approval process

Our members are our owners, and we want to be transparent in our filing process and the potential impact to you. All utilities regulated by the PSC in Maryland have to go through a rate approval process. During this time, we will be providing more detailed information and updates on the status of the filing. You can find the case at webpsc.psc.state.md.us/DMS/case/9688.