Electric Rates Are Expected To Drop

SMECO Predicts Years of Declines

Southern Maryland Electric Cooperative customers should see reductions in their electric bills in the coming years, starting with a 6.5 percent drop next year, SMECO officials said.

"Energy prices appear to be not only leveling off but going lower," said Joseph V. Stone Jr., chairman of SMECO's board of directors, at the start of a meeting with Charles County commissioners this week.

The meeting covered the price reduction, a number of infrastructure improvements in Southern Maryland and business ventures with U.S. Navy bases in the area.

SMECO, which serves about 147,000 customers in Southern Maryland, buys power from 25 organizations in a portfolio investment approach. Austin J. Slater, SMECO's president and chief executive, said that since January, as SMECO has renewed contracts with each organization, the pricing has decreased. Because SMECO is a cooperative, the reduced prices are passed on to customers. Officials said they expect this trend will continue in years to come.

The annual power bill for the cooperative is expected to drop from about $377 million this year to $351 million next year, Slater said.

Delivery rates will not change, but the service rates will show an estimated 6.5 percent reduction for residents and large commercial properties. Small commercial properties will have about an 8.5 percent rate reduction.

Customers also will have the opportunity to reduce their bills by using several new and some improved energy-efficiency programs offered by the cooperative. Residents and businesses have several programs that will offer them incentives with SMECO, as well as energy reduction on their bills, such as programmable thermostats, rebates on energy-saving lights and appliances and free energy audits.

"Rather than building bigger power plants, we are investing in energy conservation," Slater told the two boards.

Commissioner Wayne Cooper (D-At Large) said energy consumption is "something we are all conscious of" but sometimes need guidance on how to "slow it down."

One of the many system projects that officials highlighted was the addition of the Patuxent River Naval Air Station in St. Mary's County to SMECO's system. Over the next five years, SMECO will power the base and work to upgrade its power generation facilities and infrastructure to SMECO standards.

Commissioner Gary V. Hodge (D-St. Charles) said that securing the contract with Pax River "is a tremendous thing for this organization to achieve."

The cooperative has had initial conversations with Naval Support Facility Indian Head to do similar work to privatize the base's electric system.

Kenneth Capps, SMECO's chief operating officer, detailed plans for an environmentally friendly White Plains Regional Office and operations facility that would be finished by summer 2011. Officials also discussed plans for transmission lines to add support to the growing Waldorf and St. Charles areas and to western Charles County.

SMECO also is moving forward with engineering plans for high-voltage transmission lines in Calvert and St. Mary's counties, called the Southern Maryland Reliability Project, that would connect to lines in Charles to increase the reliability of service throughout the area.