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From the CEO's Desk

May 2017

New Rate Structure Effective in May

 

In March, Sumner-Cowley Electric’s Board of Directors approved the new rate restructure proposal which provides your cooperative a 3.6 percent increase in revenue. Beginning with your May bill, members will see these changes on their statements. 


The change was undertaken in order to ensure all members pay their fair share of the fixed costs of operating the electric distribution system by shifting more of the fixed cost recovery from the energy charge to the fixed customer charge.


Fixed costs remain consistent month to month and include expenses such as operation and maintenance expenses, meter reading, billing and administrative expenses, as well as depreciation expense on vehicles, equipment and the electric distribution and transmission system. Sumner-Cowley’s facilities charges, like the rest of the electric utility industry, currently recover a portion of the fixed costs. But, some of these costs are also recovered through the energy charge. Since a consumer’s energy use is driven by such factors as weather and personal behaviors, these fixed costs may be over or under recovered when collected through an energy charge. The redesign will create a better alignment of how costs are incurred and how they are recovered.


The new rate design will give members a clear presentation of what it costs to run the utility and how changes in the cost of energy affect them. This 3.6 percent increase in revenue will give Sumner-Cowley the additional revenue needed to ensure the financial health of your co-op.


Through this process it was also necessary to make changes to how Sumner-Cowley classifies its rate groups. Sumner-Cowley has moved from 14 rate classes to 10 rate classes. 


This rate adjustment represents the first rate increase seen by Sumner-Cowley members since 2004 and only the second since 1993. Sumner-Cowley was able to achieve this through various cost saving measures such as a reduction in staffing, a reduction in the number of directors on Sumner-Cowley’s Board as well as the installation and operation of a Peak Shaving Generator which has saved Sumner-Cowley nearly $250,000 in purchased power costs since 2015.
While power prices are up nationwide, as a not-for-profit electric cooperative, we will continue to do everything we can to manage costs. Our mission has always been to provide you with reliable and affordable energy. And that’s not going to change. 

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