Economics tells us that having more sales tend to bring down the prices. The components of electric distribution tariff consists of different items. Distribution, Supply and Metering (DSM) Charges are among basic fees that are collected from residential consumers. Figure below from the Energy Regulatory Commission (ERC), illustrates the components of the total residential distribution tariff.
In this blog, we show that increasing the electric energy sales tend to reduce the DSM charges of the Electric Cooperatives (EC). The next figure is derived from the EC data and is analyzed thereof. It is shown that the more energy sales produced by an EC, the lesser DSM fees the consumers pay. This is due to the fact that the path of electric power flow to more consumers is being utilized efficiently. More consumers means more power to be distributed, supplied and metered using the same electric distribution circuits. EC #95 having more sales charges the lowest DSM fee while EC #3 charges the highest DSM fee having the lowest energy sales. It is interesting that EC #94 charges low DSM fees while providing not so much high energy sales. This may be due to the distribution system configuration of the said EC where is utilized efficiently.
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