Dennis Svanes, General Manager/CEO
Our cost-of-service study and rate analyzation are not exactly riveting topics, but they are very important to 4 Rivers Electric Cooperative, your board of trustees, and you—our members.
The board’s goal is to work towards a rate design that will match revenues to costs, so that what members pay for specific items aligns more closely with the cost of that item. This means that the costs associated with having an electric service—fixed costs, demand costs, and energy consumption costs—are assessed accurately and fairly for each component within each of the rate classes. Adjusting these components within our rates will decrease overall costs for some, increase for others, and have no effect on the rest.
A customer charge is assessed monthly to cover the costs for the cooperative to provide electric service to a location without regard to energy usage on the account. If that fee is too low, energy costs increase to make up for the deficit. This cost shift means that those accounts using more electricity are subsidizing the accounts without usage. By bringing that base service charge closer to the actual cost to have electric service in place, we can collect revenues for associated costs more accurately. The takeaway: an increase in the monthly service fee does not necessarily mean an increase of the overall bill—just that the cost components are being adjusted to more accurately represent costs incurred for service.
Your board of trustees is anticipating a rate hearing with the changes I have discussed. Proposed adjustments will have an overall revenue-neutral impact to residential/non-commercial services and services in the general service large category. The general service small rate schedule category will see an overall 2.78% increase, with a significantly higher base customer charge. Again, a higher customer charge doesn’t necessarily mean a higher bill at the end of the month due to adjustments in the energy charges.