TELLURIDE – In two months, residents and homeowners in the greater Telluride area could see a reduction in their electric bills.
“It’s not often that I get to announce a decrease on your electric bills, but if all goes as planned, as of Nov., 1, members in the Telluride region who are subject to the Nucla-Telluride transmission line surcharge will see a decrease in the surcharge from 7.474 percent to 3.5 percent,” SMPA General Manager Kevin Ritter said in a recent statement.
This is good news for residents living in the surcharge area, which, according to the statement, includes 5,767 accounts in Telluride, Mountain Village, Ophir, Sawpit and eastern portions of San Miguel County. from the top of Lizard Head Pass through the Trout Lake/San Bernardo area, the Telluride region and down valley through Placerville to Specie Creek Bridge, Illium Valley and Specie, Wilson, and Sunshine mesas.
Since June 2010, residents of the greater Telluride area saw a 7.474 percent surcharge on their monthly electric bills, which went to funding the Nucla-Telluride Transmission Line, an upgraded 115kV line owned and maintained by Tri-State, SMPA’s wholesale power supplier, designed to replace an aging and too small 69kV line.
In a recent interview, SMPA Communications Executive Becky Mashburn said that while members in the Telluride region will see a reduction in the surcharge amount appearing as a line item on their bill, whether or not they see a reduction in their bill is more dependent upon their energy use.
“As we head into winter, electric bills often increase for obvious reasons – the colder the weather the more energy people are using,” she said. “Therefore members may not see an overall reduction in their bill. They will however, see a reduction in the surcharge.”
The surcharge was added to fund the portion of the Nucla-Telluride line placed underground, rather than aboveground, totaling approximately 10 miles of new line on Specie and Wilson mesas.
According to a 2010 SMPA statement, prior to the agreement to upgrade the powerline, Telluride, Mountain Village and the surrounding areas received electricity from a primary transmission line that runs over Coal Bank, Molas and Ophir passes. With approximately 300 identified avalanche threats along that line, the region was at risk of significant power outages during winter.
Prior to June 2010, the 60-year-old 69kV Nucla-Telluride line was backup for failure of the main line; in 2010, it reached capacity, and could no longer support the entire region during the peak winter season, leaving the greater Telluride area vulnerable to rolling blackouts and extended power outages.
In 2010, San Miguel County Commissioner Art Goodtimes voiced concern about the economic impact of an extended power outage or rolling blackouts on the region, at a board meeting, which would, he said, “be a disaster for our resort.”
Mashburn said, “After years of litigation, in 2010 it became an issue of necessity, rather than just a nuisance, and it needed to be upgraded.” She emphasizes that cooperation between SMPA, the Telluride and Mountain Village governments, the County and Tri-State was essential to the project’s success, and that the various entities’ cooperation got the project off the ground.
In April of 2010, The San Miguel County Commissioners approved a settlement agreement essentially ending the decade-long dispute over the upgrade of the line, clearing the way for construction to begin. Telluride and Mountain Village subsequently passed ordinances authorizing the surcharge on SMPA electric bills and San Miguel County passed a similar resolution.
This ended the litigation between all involved parties, including the San Miguel County Board of County Commissioners, the Coalition, the Colorado Public Utilities Commission, Tri-State and SMPA. The addition of the surcharge was a result of SMPA, the towns of Telluride and Mountain Village, San Miguel County, and the Coalition of Concerned San Miguel County Homeowners working together to move the project forward, ultimately agreeing that SMPA customers would split the costs of building and undergrounding the power line.
Construction of the new power line broke ground in June 2010, and was completed in Apr., 2013.
The new line will provide more capacity, power and backup support for the greater Telluride region. The 50-mile line transmits electricity from the Nucla substation to the Sunshine substation near Telluride.
According to Mashburn, the plan required that the money accumulated from surcharges would be held in an escrow account for the purpose of paying down the capital cost of the project while obtaining long-term financing.
It was initially estimated that the surcharge would finance approximately a $10 million loan at 8.19 percent interest. However, after finalizing all of the project’s costs and paying down the capital, only a $7.5 million loan was needed at 3.217 percent interest. These reduced numbers allowed SMPA to reduce the surcharge percentage consumers see on their monthly bills.
Mashburn said that because the anticipated costs were lower, SMPA now has the ability to reduce the surcharge by approximately 50 percent, while still continuing to pay the costs of the upgrade and undergrounding.
“The 3.5 percent surcharge you see now represents us paying off the remainder of the low-interest loan, and any excess we see from increased usage will be used to pay the principal,” she said.