This month's question: What pressures have you felt recently regarding your rates, and how
have you addressed them?
Answer: Howard Electric, like other co-ops across the nation, has felt the increasing rate pressures. Inflation in costs of material, fleet expenses and the fleet assets themselves played a large part in determining our 2023 spring rate increase. A recently implemented aggressive right-of-way program and our own power cost increasing were the other major factors. As a very small cooperative, we are conscious of the fact that a large expense can have a larger impact to our members' power bills when only spread over 3,700 meters. Due to the increased costs of material, we are revamping our line extension policy and increasing the aid to construction that will be charged for new services. This will ensure each member is paying their fair share and help keep rates lower for existing members. In 2016, we introduced time-of-use demand rates to all of our residential and small commercial members. The demand component of the bill provides a more level revenue stream for the cooperative month to month, similar to an availability charge. The member's kilowatt demand set each month varies less than the kilowatt-hour sales do. For the members, it allows them more control over their bill. The demand is time-of-use, giving the member the option to choose if they want to shift their usage outside of the demand hours.
Answer: Resiliency is the new buzzword, but MCEC actually has rate resiliency. In 2014, legislation required utilities to evaluate rate cross subsidization. We took a deep dive into subsidization within rate classes. This research proved that volumetric two-part rates inherently create subsidization, meaning high energy users subsidize low energy users. The typical high energy user is manufactured housing, which normally correlates with low income. In 2016, we rolled out a simple-to-understand three-part time-of-use demand rate to all members. The rate was designed so that if a member makes no changes in their usage, the bill wasn't significantly changed. However, if the member chooses to shift usage outside the three-hour on-peak window each day, they can save. As far as resiliency, we are indifferent to what members do in their home. For example, our rate points members to charge their electric vehicles off-peak, but if they choose to charge during on-peak, they pay the on-peak demand charge. I truly believe our members want choices. In order to make usage choices, they must have simple rates and a clear and concise price signal. For nearly a century, our industry's only option with monthly kWh reads was two-part rates. With advanced AMI, it's time for our industry to turn the page and offer our members rate choices that are truly cost-based.
Answer: The fuel portion of Western Farmers Electric Cooperative's wholesale power bill makes up 70% of the monthly cost of power. Normally that component is calculated after the end of the month and billed by the 10th of the following month. At an August meeting of distribution members, I was asked and agreed that WFEC would estimate the fuel component and market conditions and distribute the result each Friday. The estimate is easy during stable load and fuel cost periods. However, during the recent Polar Storm Elliot, those conditions changed. The first three weeks of December were cool, but normal load with lots of wind and solar generation, some fossil fuel and the Southwest Power Pool (SPP) market delivering power at an average of 3 to 4 cents per kWh. The week of the storm changed dramatically with every fossil fuel generator running, plus hydro, wind and solar projects. Gas prices increased to over $45 per MMBtu for real-time purchases, and gas usage went from 20 million to 125 million cubic feet burned daily. The SPP market traded real-time prices higher than $300 per MWh for short periods of time. Load increased to record levels. With this weekly estimating process in place, WFEC was able to communicate the cost impacts by the end of the storm week and several weeks before it became part of the monthly bills. This early information helped members communicate the impact early to their large and small retail customers and increase their status as trusted energy advisers.
Answer: Our priority at Cobb EMC is to deliver safe, reliable power to our members at affordable rates. The advantage of being a cooperative is that we are able to focus on our members and the experience they have with us. We're living in a time where costs are rising, and electric bills have increased (for some by 40%) in certain areas around the United States. Despite rising costs and difficult economic conditions, our board of directors and employees have worked meticulously to control spending. We were able to protect our members from higher rates by absorbing more than $20 million in rising wholesale power costs last year with dividends from our wholly owned subsidiary, Gas South. Cobb EMC members' bills are $22 lower per month than the state average. We are also able to keep rates affordable by offering our members various rate plans. Members can choose what rate fits them according to their lifestyle. We have plans for members that are more energy-conscious or plans that keep it simple. Our NiteFlex Rate was the first of its kind, offering free overnight charging for members with EVs. We are also on track to achieve our energy goals as we continue to move toward reducing carbon emissions by 75% and expanding our renewable energy portfolio by 200%. These investments in sustainable technology not only support reliability but affordability for our members.