Granada Residents Discuss SECPA Utility Sale

SECPA Chief Executive Officer Richard Wilson, Discusses Sale Options

Granada residents will decide in a special election next April, whether they wish to sell their electric utility system to SECPA, Southeast Colorado Power Association. Currently, the town purchases its power from SECPA and resells it to local customers. Selling the system back to SECPA would eliminate the town as a middle man.

Richard Wilson, CEO, and Jack Wolfe, COO of SECPA, provided on overview of the power company’s operation and history to about 50 Granada residents during a town hall meeting Wednesday, September 18. The current contract for power delivery expires in 2015. Granada is one of several utilities that receives its power from SECPA, which in turn purchases its power from Tri State G & T. Wilson said because of a long term arrangement with Tri State, SECPA’s customers will enjoy a more stable rate structure. Currently, Granada customers are set up on a five tier billing classification.

The value of the utility is estimated at $450,000, a figure that has depreciated over the years from the $850,000 spent to upgrade the system for the Granada community. Granada Trustee, Tom Grasmick, explained to the audience that the Granada town government is paid for from the proceeds of electric sales and sales have been down. The Trustees have voted for several per kilowatt hour rate increases, but the revenue has fluctuated. Grasmick noted that revenue averages about $1,500 per month, but the town has seen variations from $4,000 to $1,800 a month.

“The Trustees would bank the $450,000 revenue and use it as a reserve in the general fund,” Grasmick explained. He said the town could take a two cent per kilowatt hour franchise fee which would generate about $6,500 a month and that would pay salaries to town employees and cover expenses. The fee would not be tied to charges from SECPA. Wilson noted that there is no insurance coverage for any of the utility lines in Granada, so any repairs are out of pocket for the community. If a major storm took out numerous lines, the community has only $100,000 in reserves for repairs. If SECPA owned the utility, they would cover the cost of repairs and upgrades.  He added that because of the power level that runs through the wires, the local town repair crew is not rated to fix those types of problems, so an outside service crew would have to be brought in and paid for their work.

One resident asked Wilson if they would sell the utility to another provider in the future.  “I can’t imagine that being done,” he replied, “We’re a not-for-profit organization and we’re not generating the kind of revenue that would attract an outside buyer.”  Another resident asked the status on Tri State’s plans to develop a coal plant around Holly.  Wilson said he’d be surprised if that came to pass.  “I don’t think we’ll see another large coal plant built in this country anytime soon,” he stated.  He said the only situation he could think of to change that scenario would be to see natural gas prices explode through the roof, or a scientific development that severely reduces emissions from coal fired plants.

Wilson said, “Right now there’s about a 9% to 10% power loss in the lines and one of our first steps would be to correct that situation if we buy the system. We’d also look at upgrading the metering system throughout the community.” The Trustees said they would call another town meeting before the April election for additional information and discussion for Granada residents.

By Russ Baldwin