Your cooperative serves over 37,000 members. Residential meters account for 95% of this total. Sure, we serve large loads like Crystal Mountain, Great Wolf Lodge, and Turtle Creek, but our “bread and butter” is the average home— it always has been, always will be.

As a not-for-profit electric cooperative, we strive to match our costs with where we get our revenue so that every rate class pays its own way. When you look at your household electric bill, there are only two choices for generating revenue— the availability charge and the energy charge. I’m writing today to prepare you to expect changes in the availability charge next year.

The availability charge, currently set at $18 for residential service, is a fixed amount each month. Its purpose is to cover the cost of everything it takes to have electricity at the flip of a switch. In theory, if there was zero energy used at every residential meter, this fixed charge would be enough to cover expenses at the cooperative. Theory isn’t the same as reality, however.

In the last 20 years, the availability charge has never covered all the fixed costs. A higher-than-necessary energy charge has always had to make up the difference. Why? This answer is easy. I had a plan to increase the availability charge at a higher rate every time we needed a rate increase. We wanted to gradually “ease” into the true cost of this billing component. Well, we just haven’t had enough rate increases over the last 20 years to “ease” anywhere close to the true cost. The slow, gradual approach has not worked.

This challenge has been compounded by a period of rising costs that affect us as much as any other company — our costs for everything from conductor to meters are increasing, and our availability charge needs to increase to cover those fixed costs.

It is time to abandon easy and rip off the band-aid. We are currently finalizing a cost-of-service study and expect to recommend an increase in the availability charge around $10 per month for residential members. There will also be a small decrease in the energy charge as we move fixed costs out of the energy charge and into the availability charge. Residential members aren’t the only ones who will see this change, but the details of how this rate increase looks for each rate class is complex and our accounting team is hard at work to define those details. Of course, we plan to share all of that with you in the magazine and at member meetings in January before changes would go into effect sometime in the spring.

For now, a $10 increase in the availability charge may sound shocking. We are simply updating our rates to reflect our actual costs. Yes, it could have been done long ago. That failed strategy was my recommendation. As I stated previously, it was not successful due to growth in sales and conservative operation of the cooperative over the years that resulted in few rate increases.

As we enter an era of more limited generation capacity and different energy costs for various times of day, you will likely see more incentives to use less electricity or at least to shift your electricity use outside the daily peak period of 5–8 p.m. We have no way of knowing how these future shifts will affect our revenue. Ripping the band-aid off to ensure our availability charge covers true costs will better protect everyone from future shifts in electricity consumption.