CEC announces revenue neutral rate shift
As Capital Electric Cooperative (CEC) moves into the future, we are making important changes to our rate structure. Your CEC Board of Directors and staff, through strategic planning and analysis, as well as independent rate consultations,
understand how important it is to provide an equitable rate structure for its members.
The process will start in May 2021, when CEC launches a seven year plan to move toward fair and balanced rate structures. The co-op’s main objective is to ensure all members pay the appropriate share for the benefits of being connected to CEC’s system regardless of their individual energy choices and usage patterns. While these rate changes will not provide more revenue to the cooperative, they will allow the co-op to recover more of its fixed costs through a monthly base charge.
At the same time, the kilowatt hour (kwh) rate (referred to as “Usage Charge” on your bill), will be more in line with the co-op’s energy costs from its power supplier. When complete, the new rate design will give members a clearer idea of what it costs to run the co-op and how changes in the cost of energy affect them. It is a revenue neutral rate shift to the co-op, meaning the total amount of money paid by the membership remains unchanged.
Most members will not see a substantial change to their bill’s bottom line when each annual rate structure shift occurs. However, due to differences in how members use their electric service, some members may see slightly lower bills, while others may see slight increases.
What does this mean for you?
The first change you will notice on your electric bill will start in May 2021 (the bill will arrive in your mailbox mid-June). Residential members will see a $3.00 increase in the monthly base charge and a corresponding reduction in the energy rate, which will offset the $3.00 increase for the average member (those who use 870 kWh per month). Many members will see lower monthly bills, while others might see a small increase, but in no case will it be more than $3.00 per month.
The redesign will be undertaken in seven annual stages, beginning in 2021 and ending in 2027. Each stage will occur in May and be reflected on members' June billing statements. When fully implemented, all co-op members will pay an equitable
portion of the costs to run the utility, and any fluctuations in their bill will reflect electricity usage.
As the rate structure is shifted, CEC will also roll out new optional rates and programs that provide members additional opportunities to affect their bill. By shifting their usage away from traditional peak times, participating members will see their monthly bill lowered in proportion to the peak power cost savings. We look forward to discussing these future options with you when they are finalized in the coming months.
For more information on the rate structure shift and a list of FAQ's click the link below