Rate Increase

Recently, Co-op Light & Power (CLP) underwent a Class Cost of Service Study (CCOSS) that was long overdue. The CCOSS is a study that analyzes revenue needs and identifies the utility's total cost of service so that each class of members pays its proportionate (fair) share. In addition, the study looks ahead to future years to accommodate investments in the electric infrastructure, plant, operations, and wholesale power costs. The goal is to have an accurate two-year prediction.

On the expense side, inflation is hitting us hard. We are experiencing cost increases in virtually every aspect of our operations. This includes wholesale power costs, labor, transportation, equipment, and critical distribution system infrastructure. For example, in the past year, the cost of poles has increased by an average of 75%. Transformers are up 80-155%. 2023 wholesale power is up 8.2%. Since about two-thirds of every member’s dollar goes directly towards purchasing wholesale electricity, this creates additional financial pressures for CLP.

CLP has also budgeted for the transition to Integrated Vegetation Management (IVM) to keep the trees and vegetation out of the right-of-way (ROW). Since 75% of the outages in 2022 were tree-related, CLP will attempt to triple the miles of line cleared per year. The CLP Integrated Vegetation Management Program's primary objective is to control vegetation growth along the electric lines so that the Cooperative can provide our members with safe, reliable, affordable energy services. This is accomplished by defining a cycle, using qualified personnel, contractors, and/or foresters to monitor the condition of the utility ROW, and by initiating various vegetation control practices to reduce, manage, or eliminate undesirable growth.

At the April 26^th Board Meeting, the board voted to implement the recommendations from the study. This includes reducing and simplifying rate classes, increasing the Monthly Base Fee/Service Availability Charge (SAC), decreasing the kWh charge, zeroing the Power Cost Adjustment (PCA) charge, and eliminating the seasonal tiers. The rate change will take effect on your August bill covering your July energy usage.

The monthly SAC is designed to cover expenses related to power delivery to your home. It’s the cost before you use any electricity (kWh). Specifically, the SAC will increase from $30 to $52 monthly for CLP's current residential and seasonal residential members. Small Commercial members will see their Base Fee/Service Availability Charge increase from $35 to $66 monthly.

Although there will be an increase in the Monthly Base Fee/Service Availability Charge (SAC), we will be decreasing the per kWh energy rate. Combined with the current 5-cent Power Cost Adjustment (PCA), Residential and Seasonal members are currently charged $0.16917 per kWh in the summer months and $0.15517 per kWh in the winter months. The new rate will be $0.1374 per kWh all year with a zero PCA at this time. Combined with the current 5-cent PCA, the Small Commercial members are currently being charged $0.17058 per kWh in the summer months and $0.15658 per kWh in the winter months. The new rate for Small Commercial members will be $.1374 per kWh all year with a zero PCA at this time. With the SAC increase and the kWh decrease, the average member would see their energy charges increase by $9.00 per month or a 7% increase. CLP is doing everything possible to minimize the impact on our members.

Our DSM rates will also be increasing slightly. The Freedom Heat rate currently for the months between September – May is at $0.06 per kWh and June – August is at $0.08149 per kWh will increase to $0.067 per kWh, storage heat (off-peak) will increase from $0.049 per kWh to $0.053 per kWh, and Dual Fuel is currently at for the months between September – May is at $0.05309 per kWh and June – August is at $0.06261 kWh will increase to $0.058 per kWh.

Together the rate changes will provide the required revenue to meet the Cooperative's needs in 2023. We understand that these are economically challenging times for our members and communities. As a not-for-profit electric cooperative, we don't set our rates to make a profit. Our primary objective is to provide the safe and reliable service our members expect. Looking ahead, we will continue to invest in modernizing equipment and infrastructure. In addition, we will seek to educate members on reducing their energy use and getting the most value out of their electrical service.