Central’s board commits to being a low-cost, highly reliable power provider
|Beginning January 1, 2018
| The annual recalculation of the PCA factor is expected to increase the cost of each kWh sold across all rate classes by approximately 3%.
|Beginning March 1, 2018
|Winter discount is decreased by 50% for Rates 1, 4 and E4
|Service Availability Fee increased by $2 for Rates 1, 4 and E4
Rate 1 Service Availability Fee increased from $25 to $27, and Rates 4 and E4 increased from $29 to $31
Electric rates have been on the rise in the United States for the past decade. Central Electric Cooperative members are fortunate not to have had a residential rate increase to the kWh since 2008. However, unprecedented challenges facing the industry are forcing utilities, including Central, to reexamine rate structures to cover rising costs.
According to the U.S. Energy Information Administration, residential electricity sales per household declined 9% from 2010 to 2016. Despite a decline in electric sales, the cost of purchased power is increasing. More than 63% of Central’s total cost of service was used to purchase the power used by our members. Increasing power costs and the reduction in revenue due to energy efficiency and renewables have created a “vicious cycle” for utilities (See image page 4). Rising rates make renewables more appealing to consumers while contributing to the greater decline in utility sales.
Central’s board of trustees is committed to remaining one of the lowest cost providers at both a state and national level. Central has received grants and made investments in solar and battery storage technologies to learn how these technologies can be used to benefit the cooperative. These investments, in addition to investments in smart grid technologies, contribute to Central’s high reliability standards.
Central’s leadership and strategic positioning allow the cooperative to minimize the impact of a rate adjustment to members for 2018. From 2013 through July 2017, the average cost per kWh of energy purchased from our power supplier has increased by 12.5% while Central’s average price per kWh sold over the same period for residential members has only increased 5.3%, mostly through our PCA (power cost adjustment). To date, most of the increase in costs to Central members has been attributable to increases in our cost of power which is captured through the PCA.
The PCA factor is evaluated annually and only increases due to power cost increases and not to distribution costs which are associated with the controllable expenses of your cooperative. The PCA will have an approximate impact of 3% per kWh sold beginning Jan. 1, 2018.
Beginning March 1, 2018, Central will decrease the winter energy discount by 50% for rate classes 1, 4 and E4. Currently, members receive a 1 cent discount per kWh during winter months. The discount was initially give due to price signals from our power provider. This discount will be reduced to one-half a cent. Central’s summer energy charges will remain the same. Central will also increase the service availability fee by $2 per month for the same rate classes. This will bring Central’s service availability fee closer to the true fixed cost of service of $35.50 for residential members.
Reliability and competitive rates remain the highest concern for Central’s board of trustees.