By Dallas Braun, General Manager
For several years now, one item of discussion at our member district meetings and written about in past articles has been the need to increase the monthly service charge. This charge is supposed to represent each member’s fair share of the system’s fixed costs. These include the poles, wires, transformers, meters, labor, vehicles, tools, and other equipment needed to maintain a safe and reliable electrical system available to you 24 hours a day, 365 days a year. These costs exist even when no electricity is used. Our most recent cost of service study (COSS) performed by an independent firm shows that our current monthly service charge is too low.
At the March 23 board meeting at 6 p.m., the board of directors will consider action on proposed rate and tariff revisions. The proposed rate adjustments will reflect an increase in the monthly service charge of up to $5 for most rate classes. There will also be slight increases in the energy cost for certain rate classifications. The Power Supply Cost Recovery (PSCR) factor will also be doubled from a $0.002/kWh credit to a $0.004/kWh credit.
There is a certain cost included in the full retail rate paid by members specifically for the power supply cost component. The PSCR factor reconciles any differences between the power supply cost in the base rate and the actual power supply cost incurred. If actual power supply costs are more than what is in the base rate, members will see this increase reflected on their monthly bill. If the power supply cost is less than what is in the base rate, members will see this decrease reflected on their monthly bill. TEC members continue to benefit from our wholesale power supply contract, and this PSCR factor reduction will help offset the impact of other increases.
For most members, the $5 monthly service charge increase still represents a monthly service charge below the level identified in the most recent COSS. The board of directors will likely continue to slowly and gradually increase this monthly service charge as future rate changes are required.
This proposed increase that would go into effect in July is required to ensure the cooperative continues to meet its financial debt, maintain the distribution system, and build equity. While no one likes paying an increase for services, this rate revision’s overall impact is minimal. For the average residential member using 1,200 kWh per month, the overall monthly impact will increase by $2.60 on the monthly bill.
At Thumb Electric, we are continuously working to contain costs without jeopardizing your electric service’s reliability. Please see the summary chart below for more information on all the proposed rate revisions.