SECO Energy Announces Increase in Lighting Rates
SECO Energy, a trusted, local, not-for-profit electric cooperative, is deeply grateful for the opportunity to serve over 240,000 homes and businesses in seven Central Florida counties. We are honored that our electric service touches the lives of over 500,000 consumers every day. SECO Energy has been a member of your local community for over 85 years and is one of the fastest growing electric cooperatives in the nation.
Today, SECO Energy supplies reliable electric and lighting services to more than 62,000 families and commercial accounts within The Villages community. We invest millions each year in building and maintaining our state-of-the-art electric grid, so we stand ready to meet the increasing demand for safe and economical electric power to serve your future neighbors.
SECO Energy also takes a proactive approach to maintaining thousands of streetlights that illuminate The Villages at night. In the interest of public safety and well-being, our crews patrol The Villages boundaries, investigating lighting outages and malfunctions. Our track record proves that most lighting issues are repaired within 24 hours after the lighting malfunction is reported to the utility – a response time that is almost unheard of among electric utilities. Nationally, other utilities target a repair time for lighting outages to be less than 30 days. SECO also has an interactive online tool called LightFinder, which allows members to report lighting outages or malfunctions quickly, thereby ensuring a faster response time and improved service.
As a member of a cooperatively structured utility, individuals and businesses share in the benefits and costs of SECO Energy through their energy purchases and additional energy services. Unfortunately, material costs and supply chain shortages, particularly in LED lighting fixtures and poles, have necessitated the need for the cooperative to increase the monthly rate for lighting service that went into effect on May 1. These increases are a direct result of the industry’s shift towards LED technology, which is more efficient and longer lasting, but also more expensive. SECO will also enact a more substantial increase in pole rental costs for lighting that will go into effect in October of this year.
SECO Energy’s Vice President of Growth, Smart Grid, and Operational Technology, Ben Dawson, wholeheartedly supports the Rate Tariff changes that impact lighting. Dawson reassures, “The SECO Energy team is unwavering in our commitment to maintaining competitive rates, and exceptional service to our members. The rate for lighting service had remained steady for over a decade. The industry is shifting toward more efficient and longer lasting LED lighting, and SECO is looking forward to embracing this newer lighting type, all while ensuring the continued delivery of reliable and affordable energy service to all members.”
Dawson continued, “Maintaining reliable lighting service along streets and busy roadways also involves a public safety component. SECO wants its members to enjoy the benefit of well-lit streets, walking paths, and neighborhoods that most who live in The Villages have come to expect.”
SECO Energy is a not-for-profit entity. Energy rates, lighting service costs, and additional services are structured not to turn a profit but to reflect the costs of providing power and other related services. We continually review rates through cost-of-service studies which are comprehensive evaluations of the costs associated with providing service to different customer groups, to ensure fairness and equity among ratepayers and that the cost of additional services is not subsidized by the entire membership base. The full rate tariff is available online at SECOEnergy.com.
SECO Area light rate changes FAQ
In many communities across our service area, SECO owns the outdoor area lighting products and leases it back to the residents through agreements with the governing bodies of those communities. These products (the fixture, the pole, and any necessary transformers) are maintained and serviced by SECO; repairing, replacing, and storing necessary supplies to keep these common lights in good working order.
Recently, costs for area lighting have increased. The fees for maintenance and equipment of the fixtures increased in May, and the poles and other equipment will increase in October.
SECO has been working with community groups and the relevant governing bodies throughout this process to determine the appropriate course of action in reconciling the cost of services SECO provides with the fees collected.
We’ve collected a few common questions and answers here to be sure that there is clarity on what this area lighting fee structure means for you.
What is happening?
– We need to adjust the way we pay for and maintain area light poles in the communities we serve in order to be more accurate and fair to all our members. As a result, you may see an increase in your HOA dues or maintenance assessment in your municipal tax bill.
Why is this increase happening now?
– During the course of a recent cost of services study, we discovered an imbalance in the costs borne by area lighting customers. SECO members in certain parts of our service area weren’t paying their fair share of the costs associated with area lighting.
– Our team alerted the members affected about these needed changes in May.
How will I be affected?
– You will likely see a change in your community maintenance fee. For the average homeowners this could amount to about $5 per month.
Why can’t it stay the way it is?
– SECO is a member-owned, not-for-profit utility. This means that our customers are all members of the co-op. We have a responsibility to all members to operate the utility as efficiently and fairly as possible.
– It just isn’t fair to all of our members if some communities are effectively subsidized by others, and it’s not good accounting. The new approach means that everybody pays their fair share.
What are my options?
– Nobody likes paying more for a service. We understand that. This change will ensure that all members are fairly paying for the services that they enjoy, rather than cross-subsidizing other services.
– We are talking with community leaders and local officials to find the best solution across our service area.
What are you doing to help?
– Internally, our finance and operations teams are working to make this impact as reasonable as possible.
– Our team regularly searches for additional funding sources and opportunities, and we apply for larger support through federal grants. While we don’t want to account for these before we are sure of success, these types of grants could offer relief.
How did we get here?
– Central Florida is one of the fastest growing parts of the country. We are adding electric service and infrastructure like area lighting to meet this demand. We work with residential and commercial developers to provide the type and quality of lighting that will meet their design standards, and then carry the maintenance and repair of those assets as a service.
– Over time, this carrying cost – the cost of maintaining these area lights – has grown significantly, without an increase in costs to the communities that collectively pay for them.
– We discovered the true extent of this difference earlier this year as part of a routine cost of services study.
What’s next?
– SECO is committed to maintaining a high level of member satisfaction, and we’ll continue to work with you and your community to be sure the lines of communication stay open.
What factors go into the carrying cost?
– Carrying cost is made up of depreciation, interest, and taxes.
– The formula is complicated, but 1.5% is used as a monthly factor to approximate the carrying cost of operating, maintaining and owning a co-op’s distribution investment. This is a generally accepted industry standard.
– Your personal electric bill won’t be affected as part of this change.
What will happen with the LED transition? Will that cost be included in this increase?
– Due to federal regulations, we will begin converting our area lights from high-pressure Sodium to LED lighting. This long-term project is separate from the maintenance differential we are working through today.
– The Department of Energy has produced several reports on efficiency and longevity of LED lighting. We are happy to direct you to these reports to learn more.
