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Analysis to be Done on Garkane Power Rates

It is interesting to think that behind some of the simplest everyday actions we take, there is a monumental amount of work (present day and historical) that must take place for it to happen. Flipping a power switch is something that many of us do without thinking about it until the power bill shows up each month, or worse, the power goes off. In the western US, bringing electricity to people has always been a challenge. We happen to live in one of the most remote areas of land in the country. We are largely sheltered from that reality by our ability utilize the power that is available in less than a second, at the flip of a switch.

Throughout much of the country, especially rural areas in the west, power is provided to communities by cooperatives. These cooperatives were historically formed by farmers and ranchers who lived in areas that were too far out for commercial power companies to profitably invest in the infrastructure it would take to bring power to those areas. By forming cooperatives, people were able to become connected to the power grid by spreading out the infrastructure cost among many members to make power available in the far-flung corners of the country. They then buy power wholesale by partnering with power generation companies. From there, they try to provide the lowest cost for both power and infrastructure to members. Power cooperatives are not operated like a commercial power company. You are a member rather than a customer.

The power cooperative in our area is Garkane Energy, which serves some of the most remote rural areas in the country including the North Rim of the Grand Canyon and other national parks in Utah. Here in Colorado City and Hildale, power rates have seemed extremely high to many members. There may be very good reason to think that rates are too high for our area, considering the density of connections, which tends to lower costs since there are more people shouldering the burden.

Guy Timpson is on the Garkane Energy Board and has been working to see if the rates are justified considering the density of connections here. He stated, “The Board has directed staff to put together cost analysis to see if the Twin Cities are generating more income than is being used to service the area, in an effort to potentially decrease residential rates.”

These rates were negotiated shortly after the Twin Cities came back to the cooperative after leaving briefly with the expectation that a new natural gas power plant would make the cities self-sustaining. The power plant ended up failing to deliver, due to a rise in natural gas prices, and poor performance of equipment in the plant. After the failure of the plant, they came back on with Garkane Energy under a different rate structure than the standard member rate. That rate is essentially a set cost premium rate, rather than a variable rate. The expectation was that as more people connected, it would spread the cost.

Unfortunately, there has been a decrease in population, much of it shifting from the area to various places across the country during the 2000’s and early 2010’s. Where there were many large families occupying large homes, there now sit large empty homes, consuming a fraction of the power they would if fully occupied. Arguably, fewer people are paying a rate that was projected for a community that was expected to grow not shrink.

If it is determined that Hildale and Colorado City members are generating more income than it costs to service the area, there may be a path to begin the work of lowering rates for members in the area. If you have any questions about the process you can contact Garkane Energy and attend their board meetings.

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