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CECA
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CECA |
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Cochise Energy Consumers Association
Energy costs and institutional treachery of the 1970-80’sFounded in 1983, the Cochise Energy Consumers Association (CECA) was formed to fight the rapidly escalating energy costs farmers were facing in the Sulphur Springs Valley in southeastern Arizona. Exorbitant electric and natural gas prices were its main concerns. CECA once had a membership of about 85 members which were primarily farmers and among them were a few ag-related businesses and its most visible directors were Allen Kime and Donny Wade. While actively engaging itself in utility matters until 1986, it is now dissolved… but the Arizona Corporation Commission continues to commit, and allow, institutional treachery. Irrigated farmland depends heavily on energy to power irrigation wells and often accounts for one-quarter to a third of a farmer’s operating budget. It is not unusual for a single pumping well to cost $3,000-5,000 monthly to operate of which a typical farm operation may have a half dozen or more. While a pump engine could run on propane, gasoline or diesel, those forms of energy have been generally cost prohibitive and why most farmers still rely on natural gas or electricity (electric pumps)… and before the 1970’s, reasonably priced. Unbelievable rate hikes and the Arizona Corporation CommissionBefore the 1970’s, the cost per kilowatt hour remained fairly steady at .015 cents, but soon afterwards started to climb. In the early 70’s it was slightly over two cents, by 1980 it was almost six cents and in 1983 it was .0897cents… a 500% increase not counting demand charges and other similar add-ons. All this in just 10 years! Natural gas price increases were even more brutal, in 1973 it was four cents a therm (therm = 100,000 BTUs) and by 1983 it was 48 cents… a whopping 1100% increase! In 1985 it topped out at 54 cents but in the meantime causing consumption to plummet as farmers ceased or drastically cutback their operations. Since Southwest Gas had just taken over the service area from Arizona Public Service (APS) on October 1, 1984… they were interested in selling natural gas. With a business attitude most welcomed by the farming community and through the efforts of CECA, the cost was later reduced to 38 cents to spur demand. This was the best possible price at the time which CECA bargained for and received. It was a surprising yet refreshing circumstance. Southwest Gas just wanted to sell gas and was willing to work with farmers to do what they could… they didn’t have that ‘take it or leave it’ attitude as do most utility companies. Sulphur Springs Valley Electric CooperativeConversely, the locally operated Sulphur Springs Valley Electric Cooperative (SSVEC) in Willcox bucked CECA at every turn… they were focused instead on ‘empire building’ and exorbitant salaries. Aside from the Farmers Home Administration (Farm Service Agency) causing the most damage to the local farming economy, SSVEC’s unyielding attitude made matters worse. Not once did CECA make headway with SSVEC and after some time trying, it was recognized as futile. SSVEC did however offer gimmicks such as the ‘controlled daily’ and ‘controlled weekly’ programs for slightly lower rates. This gave SSVEC (in conjunction with Arizona Electric Power Company (AEPCO)) the right to turn off these pumps (radio controlled) during peak demand periods. However it didn’t matter whether one signed up for those programs or not, all pumps in the area were still being intentionally ‘bumped off’ to avoid these peaks (a brief interruption of electricity will stop irrigation pumps). For decades farmers have accused AEPCO of doing that, even former employees have said that was the case… except none wanted to go on record. In the meantime SSVEC remained silent and offer no help… because they were the benefactors of this practice (AEPCO is the local power plant which supplies SSVEC). In perfectly calm weather electricity would be tripped and most frequently on Sunday. In answer to farmer complaints, SSVEC would tell them some cow must have been rubbing against a power-pole somewhere. Apparently Sunday was the favorite time for a cow. It should be understood, having a well shut down unexpectedly is more than just a minor inconvenience to the farmer. Not only does it always cause more work… having to re-fill the irrigation ditch and restart all the siphon tubes (by hand), often the shutdown may go unnoticed for hours necessitating the irrigation set be re-ran another 12 hours… an additional cost. In other words, irrigating a set of rows less than 12 hours often isn't enough, and since farmers change water every morning and evening (sunup and sundown), a field which wasn't watered long enough has to be re-run. If a pump stopped at noon but went unnoticed, the pumping costs for that half-day ($100-200) were for naught. The mysteriously missing utility rateAs to electric bills in general, we all know there are always a handful of add-ons but for farmers there is also the expensive demand charges (standby charge). The complex method the electric utility companies use for billing is done for one purpose and one purpose only… to confuse the issue. There is no reason why electricity costs can’t be spoke of in simple terms, being 5, 7 or 15 cents a kilowatt hour for example. If it is more complicated, then utility companies should calculate this internally, figure out what to charge the customer but indicate on the bill the rate being charged. Utility companies won’t do that however, no place on an electric bill does it say what the rate is. This is where this ‘contrived complexity’ pays off for the utility companies… if it was straightforward, if customers knew the actual rate was, they might start comparing and/or complaining. It is that simple… otherwise rates would be there for all to see. The Arizona Corporation Commission (ACC), mandated to oversee these utility companies, has failed miserably and has been especially inconsiderate of the struggling family farmer.Just prior to the 1980’s, APS was making a 30% profit on irrigation accounts (natural gas) while losing 3% on residential accounts. In the early 80’s, the ACC granted them a rate hike giving them a profit margin of 1-1/2% on residential accounts but, incredibly, also increasing their profit margin on irrigation accounts to 57%! If the residential accounts were causing APS a service deficit, this is where the rate increase should have been applied… not irrigation accounts already profitable. Ah, but farmers don’t represent a big voting block. It’s all about politics and all about votes except this rate hike helped destroy rural Arizona and… jobs. Not many people noticed the connection and that’s the whole idea. Direct connections are avoided like the plague by politicians and institutions. No direct connection… no culpability. These low residential electric rates fell way short of replacing the benefits of a viable agriculture economy. Besides, politicians figure, who but a few care about rural Arizona? Running the country in such a manner is, well, treachery. It is treachery because it is counterproductive to America’s interests. In order to get re-elected (for personal gain), the prudent course of action invariably takes a backseat to popularity. As a result in this case, that is, the loss of agricultural jobs for the sake of saving the average voter $3 a month on their utility bill, contributed heavily to the situation whereby nearly half of all residents in Arizona’s rural towns are now on welfare. A.O. Kime
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