Bill structure changes coming to April electric bills
The past few months we have communicated the need to adjust our electric rates to make them more equitable among members. After careful consideration, the board of directors approved the adjustments. These adjustments will show up on this month’s bill reflecting April’s electric usage. The rate adjustments are near revenue neutral for the cooperative and are designed to recover fixed costs more equitably. The last time the cooperative adjusted its electric rate structures was in 2011.
Cass County Electric’s residential rates consist of two main components: a basic charge and an energy charge (kWH). The basic charge is to recover the fixed costs of the cooperative. Transmission and distribution power lines, transformers, power poles, and system maintenance are examples of fixed costs. The energy charge is to recover the cost of energy purchased from Minnkota Power Cooperative.
The latest cost of service study indicates we currently do not recover enough of our fixed cost from the basic charge, but instead from the energy charge. Energy consumption varies from each member and even from month to month for every member. Recovering fixed costs from a variable component is challenging and less equitable among members. Although these rate structure changes are near revenue neutral for the cooperative, you may see a small increase or decrease on your bill, depending on your monthly energy consumption.
Starting in May (April’s energy consumption), we will increase the basic charge and reduce the energy charge. Below are examples of apartment, urban residential, and rural residential rate structure changes.
According to our analysis, the highest increase that a residential member would see is $12.65 per month. In those situations, it would affect accounts currently using no energy.
Please contact our member services department at 701-356-4626 or info@kwh.com with any questions or concerns.
Details of Charges:
Basic Charge:
This is a fixed monthly connection charge that helps recover the cooperative’s fixed costs of serving a member.
Energy Charges:
These charges represent the cost of the electricity you used in the last billing cycle. They include both a kWh charge and purchased power adjustment.
kWh Charge:
The cost of power you used plus the costs to deliver power, measured in kilowatt-hours. To calculate energy charges, multiply your rate (unit cost) by your usage (quantity).
Purchased Power Adjustment:
This charge accounts for the variable cost in wholesale power.
