Choptank Electric seeks rate increase even if you don't use power

Choptank Electric Cooperative is asking Maryland utility regulators to approve a rate increase that would raise typical monthly bills by about 6 percent.

But it's the co-op's atypical customers who may bear the biggest increase.

Customers who sip the smallest amounts of electricity pay a fixed charge each month. If the state Public Service Commission approves Choptank's request, their bills would jump from $11.25 to $32.45 — a nearly three-fold increase.

The so-called "minimum monthly charge" would affect nearly 20,000 residential accounts, or about two out of five accounts of that type, Choptank estimates.

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The Denton-based electricity co-op has told regulators it needs to raise the minimum charge to better reflect the costs it incurs regardless of whether a customer ever flicks on the lights. It still has to pay a worker to read the meter, for example.

The commission is expected to rule on the request in April 2018.

Across the U.S., consumer advocates bristle at fixed charges on power bills, saying they disincentivize energy conservation and burden the poor with higher costs.

"You want to encourage people to be more energy efficient and use less and then companies cry foul and say, 'Oh, our revenues are going down so we need to collect more on a fixed-charge basis,' " said Maryland People's Counsel Paula Carmody, who represents residential utility consumer interests.

Minimum charges are less apt to discourage conservation because they only appear on certain customers' bills. Fixed costs applied to all customers, on the other hand, may lower the cost of the energy portion of the bill, potentially reducing the motivation to save power, consumer advocates say.

Could the poor end up paying more? Choptank argues that won't be the case.

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The $32.45 charge will apply only to customers who use 296 kilowatts per hour or less per month. In a test year, none of Choptank's customers poor enough to qualify for state energy assistance fell below that usage threshold in any given billing period, according to the co-op's documents.

Many of the affected users include boat docks and vacation properties.

As for the overall rate increase, customers who use 1,000 kilowatt hours per month of electricity would pay an additional $9.10. The change would enable the co-op to collect about $8.3 million in additional revenue a year, it estimates.

At least one Choptank customer is resigned to the increase.

"As you know, everything goes up. I can’t do anything about it," said Dan Tilghman, a welder and crab fisherman who lives east of Snow Hill. “Everything goes up but the price of crabs."

Choptank delivers power to 53,000 customers across nine counties on the Eastern Shore. The co-op traces its history to a Great Depression-era federal measure aimed at extending the power grid into rural homes and businesses.

Choptank has told regulators it needs the extra money because the rate at which it's adding new customers has been too slow to keep pace with upkeep costs  Its last rate adjustment raised customers' bills by 6 percent in 2015.

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