Over the years, we have built service to some locations that end up idle for long periods of time. Every utility deals with issues like this. Since your cooperative finances the majority of our plant investments over 30 plus years, Southeastern continues to pay for the principal and interest on that debt, records depreciation of those facilities on the books and incurs other costs associated with those services while they provide no offsetting revenues. Another significant problem with idle services occurs when Mother Nature damages those facilities and we need to invest additional dollars rebuilding or repairing an idle service that is producing no revenue. Mother Nature can also create safety hazards on idle services that may go unnoticed over time and pose a danger to the general public.
We have gone for years without establishing an idle service fee and simply tried to minimize the number of idle services in our distribution system by contacting the landowner and obtaining permission to remove those facilities. Despite our efforts in the past, the problem continues to create unnecessary expenses that all of our members end up paying for.
Recently, management proposed changes to the idle service policy and the board approved the implementation of those changes. In addition to establishing an idle service fee to generate revenue to offset some of the costs associated with idle services, we will be saving man power by eliminating trips to connect and disconnect seasonal services such as pasture pumps, electric fencers, etc. These type of services will either remain connected year round and be assessed a monthly facility charge or the service will be removed.
The idle service fee established in the policy will be equal to the monthly facility charge specified in the applicable retail rate schedule as determined by the cooperative. If the member or landowner requests that the idle service be retained, the monthly idle service fee shall apply. Southeastern will begin assessing idle service fees this fall.