On June 1st, 2018, TCEC will implement a rate adjustment impacting residential members & members participating in the Pre-Pay program.
To maintain the quality, reliability and integrity of the services we provide, it is necessary to adjust our pricing structure. TCEC’s current rate relies heavily on the sale of power to recover fixed costs such as power lines, substations, equipment, right-of-way maintenance, salaries and more. This can be negatively affected by large variations in energy sales. Difficulty covering the day-to-day operating costs or collecting more than what is needed to operate your member-owned cooperative, can be a result. The rate adjustment (below) will level out the annual cash flow for TCEC, an important factor for a not-for-profit provider like us.
This table shows how the rate adjustment may impact your TCEC statement based on the amount of kWh consumed in your home.
Currently, if a TCEC member used less than 50 kWh within a billing period they would receive a bill of $28.00. With this rate adjustment we will remove the Minimum Bill billing structure. All active residential members will pay the Basic Facility Charge and cost per kWh used, moving forward.
Frequently Asked Questions
How will the rate adjustment affect my bill?
Because the Energy Charge is being slightly decreased and the Basic Facility Charge is being slightly increased you may not notice any affect on your bill. Based on a member’s energy use they could see a $3-$5 increase or a $3-$5 decrease on their monthly bill.
When will the change go into effect?
The rate adjustment will be implemented Friday June 1st, 2018. All bills generated on or after 6/1 will be calculated at the adjusted rate.
Why is the rate adjustment necessary?
TCEC depends heavily on the sale of power to recover fixed costs (power lines, substations, equipment, maintenance, poles, wires, computer systems etc.) though this model works well it can be negatively affected by extreme variations in energy sales which makes covering fixed costs difficult. By decreasing the energy charge and increasing the Basic Facility Charge, the recovery of fixed cost will stabilize with minimum impact to the member, which is very important for a not-for-profit provider like us.
How will this rate adjustment affect the co-op’s profits?
This will level out the annual cash flow for the co-op, stabilizing the recovery of fixed cost, which is an important factor because we are not-for-profit electric provider. All margins (profits) we receive are invested back into the electric system or allocated to our members in the form of capital credits.
What is an Energy Charge?
The cost per kilowatt hour consumed during a billing period.
The rate adjustment will decrease that charge from $0.120 to $0.114 for the first 1,000kWh consumed and from $0.140 to $0.138 for all kWh consumed over 1,000.
What is the Basic Facility Charge?
The monthly fee designed to recover a portion of TCEC’s fixed cost such as poles, wires, substations, etc. that are needed to provide power to your home, whether you consume that power or not. Effective 6/1, the Basic Facility Charge will increase from $22 a month to $28 a month.
Members participating in the pre-paid program pay a daily basic facility charge that will increase from ¢.92 a day to $1.06 a day.
Why do members participating in the Pre-Pay program pay a higher Basic Facility Charge?
There are many advantages to the Pre-Pay program but it does require more administrative costs, equipment, and computer software than traditional billing.
Will rates increase or decrease again in the future?
TCEC members electricity use is changing, due in part to increased electrical devices, energy efficiency efforts, use of solar energy, and other trends that create a big difference in usage of one neighbor to the next. Some members are using well below average kWh while others are consuming significantly more kWh than in the past. To continue to provide all members with quality, safe, affordable service, overtime, we will continue to adjust the Basic Facility Charge to bring greater balance and fairness to our members. The energy charge will be adjusted as the co-op’s energy costs change. Be assured that all adjustments will be implemented with the goal of having a minimal effect on our members.
What information was used to determine the rate adjustment was needed?
A Cost of Service analysis was conducted by an independent party, EEC Corporation. The study reviewed all fixed cost and the entirety of cost to serve every TCEC member. The study showed that the current residential Basic Facility Charge was below what was needed to recover fixed cost. Co-op management brought the issue before your Board of Trustees. Board members authorized development of options to adjusting the rates and voted to approve the current rate adjustment.
My bill has always been $28.00, why is it higher this month?
You have been receiving what is called a Minimum Bill because less than 50 kWh were consumed at that location. On 6/1, TCEC implemented a rate adjustment that removed the Minimum Bill provision. Moving forward you will see on your bill the Basic Facility Charge which is $28.00 a month and an energy charge for any kWh consumed.
Will the rate adjustment also affects my commercial TCEC account?
Not at this time.
My power was out for X amount of days last month, will I get money back from my Basic Facility Charge since I didn't have access to power?
No, the basic facility charge covers a portion of cost for poles, wires, substations, etc. which we work diligently to repair during an outage.
What can I do to manage my bill?
TCEC offers many options to help members manage their electricity bill. We offer online and automatic payment options, the pre-paid program, and levelized billing. We also recommend a free energy audit at your convenience. Follow us on facebook or check out our website for more tools and tips to help manage your usage throughout the year.
I was not informed of the Rate Adjustment, why?
All TCEC members were mailed a notice in April. We also made public announcements via our website, facebook page, and newsletter. Your April or May TCEC monthly statement included a flyer with the information as well. In addition, Pre-Pay program members were sent a text message. If you did not receive any of this information we may need to review your contact information and verify it is correct in our system.