Facility Charge and Security Light Increases

An article published in the January Connect newsletter (within Illinois Country Living magazine) discussed an upcoming rate increase. Due to the publication deadlines of that issue the details of the increase were unknown. We now have those details, which will be published in the February Connect newsletter. For your convenience, the information from both articles is printed here. 

                At the December 2022 Board Meeting your Board of Directors approved an increase to the fixed monthly charge for all rate classes to begin with the February 2023 Billing. They also approved a $1.00 per month increase to all Outdoor Lights.

                For most rate classes, the Facility Charge is a monthly fixed charge that covers the expenses incurred to serve each consumer regardless of energy usage. It includes costs of many things, a few examples would include poles, wires, meters, transformers, office expenses and employees.

                The majority of members reading this article are on a Residential rate and will see a $7 per month increase to the fixed charge. The rate determinations were calculated based on a detailed Cost of Service and Rate Study that carefully analyzed the costs of providing power to each rate class. Prior to that study, fixed charges were last updated in 2018.

                The chart below summarizes the changes effective next month for service taken on and after January 1, 2023. You can find your billing rate in the top right corner on the back side of your bill. You can also view the rate sheets.

Rising costs (from January 2023 Connect Newsletter)

This past year we have seen the cost of materials and supplies increase at a double-digit rate, with some essential equipment now coming in at over three times the cost traditionally paid. Not only are costs up, but supply chain shortages and high demand for electrical construction material are creating longer lead times, thus the need for the cooperative to increase its warehouse inventory holdings. We know you have seen price increases and similar availability restrictions in your everyday purchases as well.

It’s also no secret that electricity generation costs have risen in the past year. Those costs are driven by the price of natural gas and an overall scarcity in the market as regulators impose more and more environmental restrictions on the ability to generate electricity. Further, natural gas has taken a front seat with an increased prevalence on the global marketplace stage, further complicating matters.

We are fortunate in that our participation in a cooperative-based wholesale power supplier allows us to own much of our own electric generation resources. This has protected us from immediate fluctuations in the energy market and sheltered us from raising rates last summer when energy market prices spiked. However, due to inflationary economic factors, a tighter energy market and regulatory pressures throughout our industry, we foresee the inability to continue to absorb cost increases.

In late 2020, we completed a Cost of Service and Rate Study, taking an intensive look at our system and all the facets and costs of providing power to each of our rate classes. At the time of its completion, while still facing the uncertainty of a pandemic, we were able to postpone implementing changes to our rate structures due in large part to good news from our wholesale power supplier. Their outlook for 2021 and 2022 was optimistic, indicating power supply costs would remain relatively stable, thereby allowing us to meet all of our financial obligations with existing rate structures. Unfortunately, the outlook for this year is not as promising.

A new Cost of Service Study will be prepared this year. While awaiting those findings, we will utilize the results from the 2020 study to implement an increase in rate charges, starting with your February billing. Due to publication deadlines for this magazine, the exact increase is still being determined. [Those details are now available and listed above]

 In addition, we expect you will also see a small increase in the Power Cost Adjustment line item that appears on your bills throughout the coming year. As you recall, this charge reflects the difference between the cost of energy assumed in our rates and the actual cost of purchased power from our wholesale power supplier.

 I want to remind you that as an electric co-op we do not seek to earn profits for investors; we were built by the communities we serve, and our mission remains, as always, to provide you with safe and reliable service at a reasonable cost.

-Alisha Anker, General Manager