Todd-Wadena Electric Cooperative’s (TWEC) Board of Directors recently approved a rate adjustment, effective for September 1st usage. The rate adjustment will be reflected on members’ October billing statements.
There are several driving forces that contributed to the need for additional revenue. Over the past few years, the Cooperative has incurred increased costs related to wholesale power costs, long-term interest rates, depreciation, material costs, and other inflationary costs.
“A rate adjustment is never desirable, but this adjustment is necessary for the Cooperative’s financial stability,” explains TWEC CEO Dan Carlisle. “We recognize that some of our members may be facing difficult times. As your trusted energy partner, we try to absorb as many of the increased costs as possible. However, as Todd-Wadena’s recent Cost of Service Study displayed, the Cooperative is unable to absorb all of these costs. We will continue to do all we can to assist our members with energy efficiency, load management programs, conservation, and rebates.”
Per the cost of service study, TWEC needed an average 11% revenue adjustment. The exact change to each member’s monthly bill will depend on that member’s energy use and rate classification.
The adjustment will include changes to Todd-Wadena’s facility charge and kWh energy charge. Changes were made to both components to better align costs for distribution expenses such as poles, wires, and transformers to the facility charge versus the kWh energy charge. These distribution costs are incurred by the Cooperative whether or not energy is being used at a service. This not only gives TWEC improved rate stability, it also allocates costs more fairly across all users – whether they have a seasonal property or a large family home.
This is the first rate adjustment TWEC has made since 2015. That change only included a few of the Cooperative’s rate classes. The last adjustment that affected all rate classes took place in 2011.
As with all decisions made by the Cooperative, the choice to implement a rate adjustment was made in the best interest of all our members and for the long-term future health of the Cooperative. This rate adjustment is necessary to ensure Todd-Wadena has adequate revenue to cover costs and to position itself to provide members with safe, reliable, and affordable power into the future.
What ARE Facility Charge, Energy Charge, and PCA?
Facility Charge: Each member’s share of the fixed cost to distribute electricity (which includes poles, wires, transformers, construction, meters, etc.). It covers the cost of owning, maintaining, and supporting these facilities.
Energy Charge: Metered amount of kWh used during the billing period.
PCA (Power Cost Adjustment): This is a direct pass through of charges or credits TWEC receives from our wholesale power supplier, Great River Energy, to account for fluctuations in the energy market.
Other Rate Adjustments
