For just the second time since January 2009, we are increasing our rates. The change takes effect on January 1, 2020, and it will be reflected on the bill you receive in early February. The Base Charge is the primary component of our rates that will change. For Residential and Seasonal members, it will increase $3.00 per month. For the majority of our members, the Base Charge will increase from $26.00 to $29.00 (Residential members with Three-phase service will increase from $37.00 to $42.00). We have also rebalanced the other components of our rates, but in a revenue neutral fashion. For the average Residential member who uses 1,000 kilowatt-hours (kWh) per month, the bill will increase from $119.60 to $122.60, a 2.5% increase. Our Small General Service and General Commercial Service rates have also been rebalanced, with Base Charge increases and corresponding kilowatt-hour decreases.
At Bedford Rural Electric, the people who receive electricity are not just customers; they are members of our cooperative. Members enjoy certain rights that customers don’t have with investor owned utilities. For instance, you can choose to run for a seat on our board of directors, or you can serve on one of our committees. Since each member has a vote in the annual election for the board candidates, the board is composed of people who live and work in the areas that we serve.
However, many people don’t understand the various ways their membership in a cooperative affects their rates. Our rates are based on two main components – the actual cost of the wholesale power that we buy (Generation), and the cost for us to get that power to you (Distribution). Our power supplier, Allegheny Electric Cooperative, sets our wholesale power rates. Since we have a seat on their board of directors, we ensure that Allegheny works hard to keep rates low, while guaranteeing a stable supply of electricity.
The Distribution component is the cost for us to get power to you. It includes all other operational costs, such as poles, wires, and substations, maintenance of trucks and buildings, employee costs, and costs associated with keeping and maintaining our records.
One of the biggest advantages of being served by a cooperative is that we work only for you; there are no stockholders expecting a big quarterly dividend. We are a not-for-profit enterprise, which means we’re working only to provide you with economical, reliable service. Our rates are simply set to provide enough money to pay our operating expenses, make debt service payments, and provide an emergency reserve. We also collect some money, which is figured into your rates, that is used for capital improvements. It helps finance many of the expensive capital improvement projects we undertake each year to ensure that our system is not only properly maintained but delivering service reliably. Any profit (or margins) at the end of each year is allocated to each customer account as patronage capital. Patronage capital, or capital credits as they are often called, represents your investment in the cooperative and its assets.