Empire Electric Association announces rate changes for January 2024
Empire Electric Association announced rate changes are coming at the start of 2024. The association announced the changes at the end of August. In a statement, the power cooperative shared that the August 11 board decision is to reflect wholesale rate changes and reduce subsidization.
Empire Electric serves southwest Colorado as well as Eastland and Monticello in San Juan County. An online Residential Rate Comparison Tool is available at EEA.COOP. The tool can give EEA customers an estimate of how the rate changes may impact them.
EEA explained part of the reason for changes is to match changes that are being implemented by the co-op’s wholesale power provider Tri-State Generation and Transmission Association.
EEA shares that starting January 1, Tri-State’s rate changes will include making the peak period shorter, changing their structure to a formulary rate to include a true up of actual margin to their margin requirement, and a 6.4-percent increase in their existing energy demand charges.
EEA says their rate changes will maintain alignment between how the co-op pays for power and how they collect revenue, EEA is also adjusting the peak window to match Tri-State.
That window change will result in reduced on-peak time. While peak-period was previously Noon through 10 p.m., the new reduced peak-period will be 1 p.m. through 9 p.m. Monday through Saturday. Off-peak hours will be all other hours as well as some holidays including New Year’s, Memorial, Independence Day, Labor Day, Thanksgiving, and Christmas Day.
Empire Electric also announced an increase to the Grid Access Charge (GAC) for rates that do not collect enough revenue to cover their costs. EEA notes that rates short on revenue have been subsidized by members on other rates. EEa says increasing the GAC will remove subsidization from other rates and reduce the in-class subsidization of low-load factor members by those with higher load factors.
Power users can use the Residential Rate Comparison Tool online at EEA.COOP. The tool can give a clearer picture of how the change rates may impact all users, and help power users decide if the new All Energy or TOUD rate is best.
EEA customers can find their usage by logging into their SmartHub account at eea.smarthub.coop or from monthly bill statements.
TOUD Residential rates will rise for Grid Access Charge (GAC) and On-peak usage in 2024. GAC will rise from $32.00 to $32.40. On-peak usage rate will rise from $0.14814 per kiloWatt hour to $0.17027 kWh. Off-peak usage rates will drop from $0.04339 kWh to $0.04185 kWh. All Energy Rates for Residential will see GAC go from $38 to $45 with kWh remaining the same.
Additional rate change charts for other users are also available on Empire Electric’s website.
EEA General Manager Josh Dellinger shared the following press release:
EEA’s rate design policy calls for rates that are equitable, minimize subsidization, generate margins that meet lender requirements and financial objectives, and generate adequate revenue to provide safe and reliable service.
In 2013 EEA began the process of aligning revenue collection with how we incur costs to better position EEA for a sustainable future. This change moved some costs not associated with buying electricity from our wholesale power provider, Tri-State Generation and Transmission Association, from the variable energy charge to the fixed monthly Grid Access Charge.
This change helped to reduce subsidization in each rate class from members who use a lot of energy to those who do not. EEA had its last base rate increase six years ago when GACs were increased to collect additional revenue because of rising costs.
In September 2021 EEA continued the path to fairer rates and a sustainable future by adding our Time Of Use Demand rate structure. The TOUD rate provides our members better price signals through on and off peak energy pricing and brought rate fairness to a new level with the distribution demand charge. Distribution demand is priced in $/kilowatt and is used to recover some costs incurred in operating and maintaining our grid.
Those costs were previously collected in the $/kilowatt hour energy charge. The distribution demand is determined by a member’s highest 15 minute kWh usage measured during the billing period.
Charging for monthly demand by member is fairer than lumping those costs in the energy charge.
Along with introducing the TOUD rate, EEA increased the All Energy residential and general service single phase GAC to recover more operation and maintenance costs in the monthly fixed charge. This removed some remaining in-class subsidization by high load factor members to those with lower load factors. Load factor indicates how much energy a member buys in relation to their demand. A high load factor member buys a lot of energy compared to their demand, and a low load factor buys little energy compared to their demand.
The rates approved to become effective in January are anotherstep toward making rates more equitable. They also incorporate changes required by new Tri-State rates.
In addition to a 6.4% increase in their demand and energy rates, Tri-State reduced their peak period from Noon through 10 P.M. to 1 P.M. through 9 P.M., Monday through Saturday. EEA’s tariff updates include:
• Increasing All Energy and TOUD Residential and All Energy General Service Single Phase GACs to make their rate classes revenue equal to costs. We refer to this as zero net margin. The All Energy GAC increases are larger to remove in-class subsidization.
• Changing all Time Of Use Demand rates peak period to 1 P.M. through 9 P.M. Monday through Saturday to match Tri-State. On and off peak energy charges will also be changed to account for the smaller peak window. These changes are revenue neutral. Individual members may pay more or less.
• The Large Power and Transmission rates will change to formula pricing for the generation and transmission demand charges and the energy charges to maintain the straight pass through charges the current tariff has. There will be no increase in their GAC or distribution demand charge.
The Tri-State increase will impact EEA member bills in February 2024 when we update the Power Cost Adjustment charge for each rate class. This charge will continue to be adjusted each February to true up EEA’s forecast purchased power cost to actuals.
EEA has posted the new tariffs on our web site at eea.coop. You can also find rate comparison tools that will allow you to take your current usage and determine if the new All Energy or TOUD rate is best for your home or business. You can find your usage by logging into your SmartHub account at eea.smarthub.coop or from your monthly bill statement. We appreciate your support as we work to safely provide reliable power at an affordable price.