This month, members in the general service and seasonal rate classes will see the rate change on their electric bill that was announced in the February issue of Texas Co-op Power. Beginning April 1: The Customer Charge for General Service and Seasonal Rate Classes will be $29 per meter (it was $27.50 previously).
At Medina Electric Cooperative, we know that rate changes are not easy for our members. The decision to change rates is never made lightly, and the board considers multiple alternatives, but their fiscal duty to the cooperative and its members sometimes requires hard decisions be made. As a not-for-profit electric cooperative, our rates are set so that we can continue efficient operation of the cooperative, not to make profits to line the pockets of any investors.
As a member, you are an owner of this not-for-profit cooperative, and you have a real stake in its financial future. As part of their duties, the board and staff regularly review the financial health of the cooperative, and this rate change was revealed as necessary during the 2015-2016 cost of service study.
Delivering reliable electricity is a capital- and labor-intensive business, with lots of fixed costs involved. It requires a lot of employees, equipment and technology to maintain the power lines that serve your home and to run the business behind the scenes.
In spring months, when most consumers are using very little electricity because of the mild weather, all the same equipment must be in place as in August, when air conditioners are cranking at full blast. Similarly, in July, when there are generally few outages, all the same employees must be in place as in the spring months, when we have historically had bad weather and higher numbers of power outages.
Like every business, the cooperative has to balance costs with service and reliability. We could cut costs significantly by cutting employee and slashing investments in system equipment, but that would cut into reliability and lead to longer outage restoration times. Similarly, we could staff so that members didn’t experience outages longer than 30 minutes, but this would drive costs so high it would not be economically feasible for our members.
We know you work hard for your money, and that is why we work hard for you. If you have questions on this rate change, visit MedinaEC.org/RateChange or call us at 1-866-MEC-ELEC (632-3532).
Understanding Your Electric Bill
There are three charges that make up each bill in the general service and seasonal rate classes. Here is what each of those charges covers.
Customer Charge: This charge is designed to recover fixed costs that are incurred regardless of the amount of energy consumed by the member. It is billed by the meter so that all members share equally in those fixed costs.
Energy Charge: This part of the rate is applied based on how much electricity you use. It is used to recover the wholesale cost of electricity, or the price that the power provider charges Medina EC for the power it sends to your home.
PCRF: Power Cost Recovery Factor is designed to adjust for the monthly changes in the price of wholesale power, and is applied based on how much electricity you used. When your statement shows a positive PCRF, that means the cost of power was higher than Medina EC’s rate set through the energy charge. If you see a negative PCRF, the price of power was lower than the rate set through the energy charge, and you are being credited for that difference.