Rural residents face higher electric bills

Published 12:00 am Monday, August 5, 2002

Residents in Dallas County don’t have a choice when it comes to their power company.

Depending on the area where they live, they must choose either Alabama Power or Pioneer Electric Cooperative.

Jan Ellis, a spokeswoman for Alabama Power, said that customers don’t have a choice because of territorial legislation that was passed in 1985.

“If several companies went into the same area,” said Ellis, “there would be too many [distribution] lines. This would cause some major problems. That’s why the legislation was passed.”

Pioneer Electric charges more for its services than Alabama Power, which has left some of its customers upset.

According to figures provided by the two companies, Alabama Power’s monthly rate base charge is $8.91 per customer, while Pioneer charges $25 per customer for the same rate, almost a $16 difference.

Dr. Martin Blake of the Prime Group, a Louisville, Ky.-based firm that provides sales, strategic planning, rates, and training services for the utility industry, said that there are several reasons why electric cooperatives, like Pioneer Electric, charge more for their services than larger investor owned utilities.

The first reason, said Blake, is that Pioneer, which services mainly smaller rural communities, services a much smaller customer base than larger owned utilities.

“It boils down to simple math,” Blake said. “It costs approximately $17,000 to erect one mile of a single phase distribution line. If you have only an average of five member households per mile, as in Pioneer’s case, that works out to be $3,400 per customer.

“On the other hand, an electric utility in a city has an average of 55 customers per mile, which translates to only $309 per consumer.”

Additionally, Blake said customers in rural areas typically need their own transformer, which costs $500 each. In urban areas, however, a single transformer can service an average of six households, greatly reducing that cost to just $83 per customer, said Blake.

Then there is the cost of clearing right away in rural areas to help prevent power outages.

“Pioneer must continually clear 2,600 miles of right of way to help prevent outages,” Blake said. He added that rights-of-way in cities “are nothing to compare to the wooded area of Pioneer’s service territory.”

“Living in a rural area has many, many advantages,” Blake said. “Unfortunately, the price you have to pay for electric service is not one of them.”

Terry Wilhite, a spokesman for Pioneer, said that one way to reduce Pioneer’s rates in Dallas County would be to bring more jobs and industry into the county, an effect, he said, which would increase the population in the rural areas of the county.

It is something, which Wilhite said that Pioneer is currently trying to accomplish.

Wilhite said Pioneer currently operates the South Dallas Industrial Park on Highway 41, a place where several new businesses have recently located in Dallas County.

“Jobs, that really is the key,” Wilhite said. “We need more industry in the area. The problem is Dallas County’s population continues to decrease year after year. The only way to increase the population is to bring in more jobs, more industry. That is our [Pioneer’s] main focus right now.”

Wilhite added that any customers who have problems with Pioneer should contact their office at 875-2223.

Said Wilhite, “If anybody has any problems they should talk to us right away, and we will work with them as much as possible to help them in any way we possibly can.”