Cherryland takes pride in the fact that we keep the lights on as safely, reliably, and as affordably as possible for our members. In fact, when asked in a recent survey our members said their top priority was keeping up with the reliability they have come to expect. This reliability is a direct result of the kind of care and investment we pour into our electrical grid. Unfortunately, our ability to keep up our reliability comes at a continuously increasing cost. That means we need to keep up with those costs if we want to keep the lights on and outages short.   Â
However, we also understand that our members are feeling cost pressures in many aspects of their lives. We care about how this rate increase impacts our members, so we’re proposing a more spread out, two-phase rate increase. As we plan for the cooperative’s future costs, we believe our members should be able to plan for future costs too.  Â
In 2025 the first phase of the proposed rate change includes:Â
- Â $2.50 increase to the availability chargeÂ
- Â $0.005/kWh increase to the energy chargeÂ
- Reflected on May 2025 bills for the first time Â
In 2026 the second phase of the proposed rate change includes:Â
- $2.00 increase to the availability chargeÂ
- $0.005/kWh increase to the energy chargeÂ
- Reflected on February 2026 bills for the first timeÂ
We know that this new approach may raise some questions, so we hope that all of this information can help. The board of directors will consider this rate change during a public rate hearing ahead of their board meeting on February 24. You can find more information about the proposed rate change on our website www.cherrylandelectric.coop/rate-changeÂ
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Availability charge is already exorbitantly high! After increases it will be about triple what my next highest utility charges. As a low to moderate user of energy (I try to conserve), it represents nearly half of my average bill. I will consider going off the grid or changing suppliers and taking as many members as possible with me, if you can’t get this charge lowered and under control. Is Rachel Johnson the right person to lead this coop?
Agree. I pay more for available charges than my usage of electricity. I’m a senior with borderline proverty income. Need to get different utilities service if someone can start a petition. These people want to fill their own pockets. They don’t care about the people they service
Irene – I know this is difficult, but I assure you we do care. Cherryland’s 60 employees all live in this community, too. Most grew up here and our parents and grandparents are here. When we have to raise rates, we are always thinking of who they impact. The hard tension we have to balance is that the cost of investing in our distribution electric system has skyrocketed. This is due to inflation, interest rates and supply chain constraints that are unique to our industry. Cherryland has absorbed a lot of those costs while trying to maintain our best in class reliability but that only works when the cost increases are temporary. In reality, they are likely permanent. As the cost of reliable electric service goes up, the rate you pay for it must also go up. We are not filling our own pockets. We are a not-for-profit cooperative and any margins we have left over at the end of the year get returned back to our members via our capital credit retirement process.
Given your income constraints, I would encourage you to reach out to DHHS. You may be eligible for energy assistance to help you with your bill if you have a difficult time paying it. We also offer a budget billing program that may be helpful for you, feel free to call our member services department to discuss it.
Thank you for your feedback, our board and team do take all of this into consideration as we plan for both future system investments and future rate discussions.
It seems this method of increase has lower energy users subsidizing higher energy users.
Maybe time to look at other options:
In this day and age do we still need 6 or seven coops in northern MI – maybe time to consolidate and remove redundancy?
How much money is evaporating between the coops and Wolverine power?
Availability charge for another property, that I own in northern MI, serviced by Consumers Energy is $8.00 – maybe CEC is no longer
relevant.
Time to look at all options !
Hi – thank you for your feedback. There are a lot of different ways a utility can collect the revenue it needs to cover its costs. Cherryland has historically opted for a simple fixed fee to cover fixed costs (the availability charge) and variable rate for variable costs (the energy charge). Under our current rate structure, the fixed fee must cover fixed costs in order to avoid subsidization. Regardless of how much (or little) a member uses, there are still costs associated with maintaining a reliable grid that is available when you need it. I understand that you don’t like the fixed cost, our lowest users seldom do. That doesn’t make it unfair, it simply makes it unpopular. Lower users are not subsidizing higher users. To the contrary, when our fixed fee was falsely low, higher users were subsidizing you.
While this is how our rates have been structured for decades, it is something we are evaluating. I have asked our team to evaluate more complex rate structures that might help us take some pressure off the availability charge, give us price signals that let members have more control over their energy costs, and make the relationship between our costs and rates even more transparent. We are investigating possible rate structures with a goal of rolling out a new system the next time we have to tackle a rate change in a few years.
One last comment, since you mentioned other utilities and Consumers. The availability charge is greatly influenced by customer density. Utilities like Consumers and TCLP serve, on average, about 40 meters per mile of line. That means they can spread the cost of one mile of line (a fixed cost) across 40 meters. Cherryland serves 12 meters per mile. That mile costs the same for us (sometimes even more in remote, rural areas) as it does for a utility like Consumers but we have to recoup that cost from 12 people/meters. It’s just the nature of serving a rural area. Still, despite the disparity in our fixed fee, the all in bottom line bill cost for an average 700kWh user on Cherryland’s lines is almost 20% lower than the bill cost for that same user on Consumer’s lines.
Still, we are carefully evaluating options and everyone here realizes that we must look for creative ways to manage the rising cost of electric reliability and having a robust electric distribution system that our members can count on.
If you have more questions or feedback, feel free to reach out to me directly or to swing by and give the board feedback at our member input session regarding rates on February 24 at 9am at our office in Grawn.
REDUCE OUR AVILABILITY CHARGE TO $10 (MAX)
Charge what it costs, Pay for what you use. The cellular phone companies learned this the hard way adding “Charges” to the bill. This was found to be dishonest and deceptive buy customers.
When you buy a gallon of gas or milk they don’t then send you a bill for admin / other costs. Stop this, the cost of the unit of energy should include its admin and other costs. Don’t be deceptive. REDUCE OUR AVILABILITY CHARGE TO $10
Hi Chris – I understand what you mean, but would point out that we are charging exactly what it costs. We are a not-for-profit utility who provides electric service at cost. If we have overcollected at the end of the year, we return that directly to our members in the form of capital credits. Regarding the structure of our charge – we aim to recover fixed costs in our fixed charge and volumetric costs in our volumetric charge. In reality, our fixed costs represent about 60% of our costs and we collect less than 30% in our fixed charge. We have to cover our fixed costs or we can’t keep the lights on.
While I appreciate the comparison to milk or gas, our business is honestly just different. 100% of our revenue comes from the sale of electricity. We have a very narrow margin for error when it comes to electric reliability and when we fail to keep the lights on it poses a risk to public health and safety. If we were to reduce your availability charge to $10 and then have a year of sluggish sales due to mild weather, the cooperative would operate at a loss. If that happened year over year, we would have to make cuts to things like tree trimming, system maintenance, and grid reliability. There is a cost to having reliable electric service available and while we do everything we can to control those costs, there’s only so much we can cut before reliability suffers.
While I stand behind our current rate structure and will continue to point out that Cherryland members PAY LESS for MORE RELIABLE service than they would get with the neighboring investor owned utility, we are continuing to evaluate our approach to rates and considering other structures that may allow us to manage the pressure on the availability charge differently. We’ll be doing that analysis and planning over the next few years with a goal of communicating the results of that work to the members sometime in 2026.
Thanks for the feedback.
Clearly we will disagree on this item. I would like our model to be different than the one you have chosen. This would not effect the level of reliability and it would make the cost of electricity fair and equal to all, as its not now.
I believe that $10 a month is reasonable. Increase the cost of energy peak and off peak to include nearly all of its costs. Including what it take to get the energy to the customer.
We don’t all pay less at Cherryland Electric.
Chris – Maybe we’ll disagree, but I still appreciate the conversation. I love talking about the energy industry so I always look forward to chatting with smart, engaged members.
Your point about peak pricing is a good one and certainly something we are looking at. In particular, we are evaluating residential rates that consider both peak demand and timing in residential pricing. Our thinking on this is a little ahead of the curve on utility rates, but we think it is worth modeling and evaluating. If we introduced demand-based pricing, it would create a price signal that could incentivize reducing demand on our system which would be great for lower users like yourself.
As to whether $10/month is reasonable to reflect the cost to get energy to you, reasonable is not the same as accurate. We cannot cover our fixed costs to provide energy if every meter only paid $10/month. If we can’t cover our fixed costs, we have to cut something – poles? lines? bucket trucks? IT systems? Those things are all fixed costs that we incur before you buy your first kWh each month, and they cost the Cooperative way more than $10/month. To fix that problem under our current structure, our energy charge would have to double and that would disproportionately impact higher users. People commonly assume that high users are just big homes and rich people, but the opposite is true. Our high residential users are often our most vulnerable members, many renters, who are stuck in energy inefficient homes or dependent on things like space heaters for home heating. Forcing high energy users to pay more than their actual share of the fixed system costs is not entirely fair either.
I’m sorry you don’t pay less at Cherryland, most do. I hope you still find value in the service we provide. Feel free to reach out to me directly if you want to discuss further.
No issue at all, It’s important to keep pace with growing tech needs regarding energy. Long term, it will slow cost increase with time. All smart forward thinking companies are staying ahead of the curve with tech, if not, their relevance will fade. Overall, energy cost in northern MI is very reasonable, coming from Phx, where the summer power bills from APS are over $500 per month. Resulting with many customers having to choose food, Rx or paying the APS power bill to keep the AC going.
Thanks for the feedback, Joe. My husband is from Arizona and we lived in Southern California for about 7 years. It’s amazing how much more expensive energy is in the southwest part of the U.S. You have my promise that we will do everything we can to make sure our members don’t have to choose between food and energy. And, we’ll continue to stay on the front end of the curve as it pertains to technology and modernizing our service model.
I have been with cherryland for years, however After getting hit hard enough to completely cripple my families monthly budget with the cold snaps that I feel we got double charged for, I’m reconsidering my account here. My family actively tries to reduce our usage, and from December through February the cold kicked it so high we are now having to take it out of our food budget which is already small, just to cover, and now you want more? Haven’t any of these CEOs years the saying you can’t get blood out of a turnip? So what I am taking away from this is that you don’t care that my family and other will have to choose between feeding our family to pay more for something that is already as high as we can handle. Great to know, I will be looking into other companies and options.
Hi Amanda – I understand, I know how hard it can be to manage so many rising costs at once. Raising rates is something we take very seriously because we know it impacts our members. Unfortunately, the cost of all the goods and materials we use has gone up and continues to go up. We simply must raise our rates to keep up providing reliable electric service. If your family is struggling with the costs of the necessities, please keep in mind that you may be able to qualify for assistance with your electric bill. If you give our member services department a call, they can help connect you with assistance agencies. Our number is (231) 486-9200.
Besides the rate changes we now have retaliation of Trump’s tariffs. Canada is increasing rate which could add up to $100 a month. I still haven’t heard if Cherryland’s electric supplier gets energy from Canada, so we don’t know if we are impacted or not. Rachel, you need to let us know.
So, the PSCR adjustment went up with the January billing. Now we have the 2 Phase increase to contend with. In my case, I did a “What If” calculation to see what impact I will have. I based my “What If” on the usage from my November 2024 billing because we are out of state, currently.
The PSCR adjustment did add approximately $5/month to my bill.
The Phase I adjustment will add (cumulatively) approximately $11-$13/month to my bill.
The Phase II adjustment will add (cumulatively) approximately $17-$20/month to my bill.
I didn’t even add Sales tax to these “What If” calculations because I have NO clue how you charge Sales Tax on our bills. It isn’t 6%. How do you calculate it?
Hi Greg,
None of Cherryland’s electricity is imported from Canada. Our regional grid operator, MISO, imports about 1% of their total energy from Canada and they manage fluctuations in energy availability greater than that on a daily basis. So, right now, I have no major concerns regarding reliability.
We are keeping a close eye on the tariffs and how they may impact on our raw materials. We’re making contingency plans as the situation continues to evolve. Our approach here is to be prepared to respond, but careful not to react to something that may soon change. This is the most likely area that could eventually have an impact on your bill – but again, we are keeping a close eye on it and planning accordingly. I can appreciate that you expected to hear from us by now – and we always aim for proactive, transparent communication. The constant evolution of this situation has made that challenging.
As for the PSCR, it did go up in January, but we are expecting it to go down in the next couple of months. It’s a flexible billing mechanism that helps us manage our power supply costs so we don’t have to increase rates more than necessary. So, while you do notice it increase from time to time, it is determined monthly and brought down as soon as power supply costs signal that we’re able to do so.
To answer your question about sales tax calculations, Michigan’s tax code requires a 4% sales tax on residential electric utilities. The availability charge, energy charge, and PSCR are all taxable, so the sum of those three factors is used to calculate the 4% sales tax.
Raising rates is never something we like to do, but unfortunately with the cost of essential materials like poles, wire, transformers, trucks, and everything in between on the rise – it’s something we need to do to continue providing reliable electricity.
Thanks for taking the time to reach out and share your thoughts and concerns.