What is a System Charge?
Ready to serve. Power when you need it. Sharing costs between part-time residents and the local folk. Those are the aims of a system charge.
Two things make up rates. The energy price that covers the cost of electricity PUD 3 purchases and sells to its customers, and the system charge - the cost to operate and maintain the system.
Many rural utilities design their rates to balance the cost of service for full-time residents and vacation home customers. The result is usually lower per kilowatt-hour rates and somewhat higher system charges when compared with more urban areas.
PUD 3 has a lot of vacation homes (over 25%). Our studies show that a daily charge mixed with a per kilowatt-hour rate better addresses spreading the cost more equally among seasonal and full time residents.
The system charge has been a part of PUD 3's electric rates since 1978. To explain the system charge, consider the case of a vacation cabin. Even though it is often unoccupied for long periods of time, there are still fixed costs for being ready to serve the cabin. Though power is not being used, the meter read is collected, the billing processed, and if there's a storm, the damage to the PUD's electrical system is repaired.
If those fixed costs were added to the price of each kilowatt-hour of electricity, the large users (such as local electric heat customers) would end up paying for the services used by that cabin. So instead, with the system charge, those costs are divided evenly among all customers connected to the system. That way, each customer is being charged the full costs of having their home connected and ready to be served by the electric system whether or not they consume electricity.
Think of the system charge as a “ready to serve charge.” Regardless of the amount of electricity a customer uses, or when, they assume that the service will always be available when they are ready to use it. This helps share costs across all customers; full-time and seasonal.
If you or someone you know could use energy assistance, learn more about PUD 3's Assistance Programs for qualifying customers.