After careful consideration, the Meeker Cooperative Board of Directors approved an overall rate increase of 3.2% to address the impact of inflation on the price of energy and critical electrical distribution equipment.
One of the most fulfilling parts of leading an electric cooperative is that we are guided by service to our members rather than profit. We only raise rates when necessary to maintain the integrity of our operations, which allows us to focus on the quality of our service to you, our members and owners. I want to take this opportunity to explain the reasoning behind the upcoming rate increase across all rate classes and what changes you can expect on your bill.
Meeker Cooperative has felt many of the same financial pressures as the businesses and families we serve including inflation, increased interest rates, and supply chain disruptions. These challenges, combined with the rising costs of wholesale power, have put a strain on our budget. As we prepared for 2024, our financial forecasts indicated that additional revenue would be needed to maintain operations and support crucial investments in the long-term reliability of our distribution system.
To address these economic challenges, we launched a Cost of Service study in collaboration with an independent firm to analyze our revenue requirements and provide us with valuable insights to determine the level of revenue needed to maintain the quality of the Cooperative’s distribution system. The study concluded that a revenue increase of 3.7% was needed to avoid making cuts that would undermine our ability to meet service goals and support ongoing investments in the quality and integrity of our electrical distribution system.
Board members reviewed and discussed various rate adjustment options and chose what they believe is the best plan that balances the impact on our members with the need to maintain our financial stability, ongoing operations, and investments.
Beginning April 1, 2024, the Fixed Charge for the Small Single Phase rate class will increase from $43 to $46.50, an increase of $3.50 per month. This includes residential, seasonal, and small commercial or agricultural accounts, which constitute over 96% our membership.
The monthly Fixed Charge covers our costs for delivering electricity – including labor, maintenance, and repairs to distribution infrastructure. These costs exist no matter how much energy members use, which is why the charge is fixed and equal for all members within each rate class.
In addition to the Fixed Charge increase, there will be a slight adjustment to our energy rate structure. The Energy Charge will no longer have seasonal variations. The summer rate will remain unchanged at 12.3¢/kWh, while the rate for other months will increase from 10.3¢/kWh to 12.3¢/kWh. Additionally, the Power Cost Adjustment (PCA) will be adjusted to show $.0000/kWh. This enhancement makes your bill easier to understand and reduces the cost of the summer rate by 1.12¢. From time to time an adjustment to the PCA may be warranted, such as the Cooperative receiving a PCA from one or more of its wholesale power providers. Meeker Cooperative’s budget isn’t able to absorb a large wholesale PCA charge.
The chart below shows a sample of how the new monthly Fixed Charge and Energy Charge will affect the Small Single-Phase general service accounts at various levels of monthly kWh usage.
It is crucial to emphasize that the overall increment for individual members will fluctuate based on their energy consumption, alongside any applicable taxes and location-specific fees. We recognize that a change in our rates means a change in your bill, and your household budget. We want to remind you that you have access to resources to help keep your monthly bills manageable.
The Cooperative provides an array of energy management programs and rebates designed to assist you in conserving energy and cutting costs. By engaging in programs like dual fuel heating, peak shave water heating, cycled air conditioning, interruptible irrigation, and interruptible generators, members can play a role in maintaining stable rates and reducing expenses. These initiatives enable the Cooperative to lower system demand, potentially avoiding or minimizing wholesale demand charges. Participation in these programs not only results in a reduced energy rate for members but also makes them eligible for available rebates.
The kWh rate for our energy management programs for dual fuel heating, peak shave water heating and cycled air conditioning remains the same at 5.7¢/kWh and 6.2¢/kWh. Our energy management programs offer members a choice to have lower space heating, cooling, and water heating operating costs.
Our energy experts are available to discuss load management and help you determine energy solutions that work for you. Visit www.meeker.coop/programs/ to learn more.
For those facing financial challenges, members can contact the Cooperative to establish acceptable payment plans. Additionally, the Minnesota Department of Commerce provides energy assistance programs and resources for eligible members to address utility bill payments. For more information, members can reach out to the energy assistance providers listed on our website at www.meeker.coop/energy-assistance/
While adjusting rates is never an easy choice, member value is always our top priority with these decisions. Meeker Cooperative will continue its mission of providing reliable, safe, and affordable electric service.
Looking ahead, we will continue to invest in modernized equipment and infrastructure and provide members with up-to-date information on how you can reduce your energy use and get the most value out of your service. If you have any questions or concerns regarding this rate adjustment, we encourage you to call our office during regular business hours (8 am-4:30 pm) at 320-693-3231.