Rate adjustments to be included in February bill
Rate design is a balancing act between meeting our revenue needs and minimizing member impact. Since we are a not-for-profit organization, we do not need large profits to satisfy far-away owners. Rather, we simply need to recover our costs of doing business, as well as provide sufficient margins to reinvest back into our electric distribution system.
Effective January 1, 2017 the majority of our membership, which is residential, will receive a $1.00 facility charge increase. Members on three-phase and hog confinement rates will see a $2.00 facility charge increase. Additionally, members on the residential rate will see a slight decrease in the energy charge; moving from $.1095 per kilowatt hour to $.109. Members should expect the changes on February bills for January usage.
We are asked from time-to-time, what is the facility charge? Let me explain this way. Your power bill has three components; the facility charge, the energy charge and a purchased power adjustment. The intent of the facility charge is to cover the costs we incur to build and maintain the system that carries the electricity to your home or place of business. Even if we never move a single kilowatt over the wires, we still face these expenses in keeping the facilities in place to carry that energy.
McDonough Power Cooperative’s rate design mission is to establish rates for the membership that are consistent, transparent and ensure the financial stability of the cooperative. The rates established will provide for sustainable, high-quality delivery of electric service.