At their September 2019 Meeting, the Medina EC board of directors approved changes to the Medina EC tariff that go into effect May 1.
These changes will place a $35 minimum bill on the General Service rate class. This means that for any members within the General Service rate class that would have received a bill for less than $35, the bill will now be rounded up to $35. Based on members’ use in prior years, this change will impact about 4,500 members who generally use 50 kilowatt-hours or less per month.
This rate change is the result of the 2018 cost-of-service study performed by Guernsey. In cost-of-service studies, which the cooperative has historically undergone every two to three years, an outside firm reviews the cooperative’s financials and looks at the costs associated with serving each rate class. They then determine rates for each class based on the cooperative’s revenue requirements and financial goals set by the board.
This cost-of-service study revealed that there is an under-recovery of fixed costs for low-use accounts—or those that use less than 50 kWh per month—on the General Service rate. In other words, accounts with very low kWh use are not being billed enough to cover the costs incurred in serving them.
Our goal in setting rates is to make them as fair as possible for all groups of members and to ensure they are based on the costs to serve that group. This $35 minimum will ensure members who use very little power are not being subsidized by members who use larger amounts of power.
As a not-for-profit electric cooperative, our rates are set to continue efficient operation of the cooperative, not to make profits to line the pockets of any investors. Delivering reliable electricity is a capital—and labor—intensive business, with many fixed costs involved. It requires employees, equipment and technology to maintain the power lines that serve your home and run business behind the scenes, regardless of if you ever use a kWh or not.
This change to the bill minimum does not impact the Member Charge, which is currently set at $29, or the energy charge, which is applied per kWh used. Both those charges will remain the same.
If you have questions on if these tariff changes could impact you, please contact us at 1-866-MEC-ELEC or [email protected].