As a member of Todd-Wadena Electric Cooperative (TWEC), you make an investment in the co-op every time you pay your bill. In addition to the amount you pay per kilowatt hour (kWh) based on your individual usage, your payment covers the monthly facility charge that helps us cover the expenses of maintaining our overall electric system. This includes maintaining poles, wires, substations, and co-op equipment.
Although the name of the fee may vary, a ‘facility charge’ or ‘fixed charge’ is necessary for all electric utilities for rate equity. It is important to note that the facility charge can vary quite a bit from one utility to another. A significant factor in determining a utility’s facility charge is the number of members or customers a utility has per mile of line. TWEC averages approximately four members per mile. In comparison, the average rural electric cooperative has eight members per mile – with the average utility having 32. This factor directly affects how costs are dispersed across the membership. For example, TWEC’s costs per mile of line are spread across four members, while another utility can spread those same costs across 32 customers. This is why the facility charge can vary greatly, especially in more densely populated areas.
The facility charge on your energy bill pays for the costs required to provide electric power to you other than the purchased power costs and demand costs. For TWEC members, this includes more than 1,795 miles of overhead power line; 38,000 poles that hold the line up; 496 miles of underground cable; 14 substations; and a fleet of 18. The cost of these facilities must be recovered, even if you’re a seasonal member who elects not to buy any electricity during a specific period. Similar to a cell phone bill, there is a monthly charge to continue the service regardless of how much you use the service.
No matter how much electricity a particular family uses, the cost of delivering power to that house is the same as it is to its neighbor. As a not-for-profit electric cooperative, we believe operational costs should be spread fairly and equitably across all of our members, regardless of the level of electricity use. That is why every member pays a facility charge each month to cover basic operational costs. All members within a rate class are charged the same amount for the cost of operation since all members benefit from the same service.
In summary, TWEC’s facility charge is a direct reflection of the average cost to provide the first kWh of service to a member. The charge covers the cost of owning, maintaining, and supporting the cooperative’s facilities. With the cooperative’s fixed costs increasing year over year, the facility charge is a component of our rate that will periodically get adjusted when TWEC’s Board of Directors decides an adjustment is necessary.
For each of the 12,354 meter points in TWEC’s service territory, we make a significant investment to provide power to each of our members. Having a facility charge enables the cooperative to maintain this investment and ensures our members receive safe and reliable electricity.
Daniel Carlisle
President/CEO & General Counsel
