At their September 2019 meeting, the Medina EC board of directors approved changes to the Medina EC tariff that will go into effect January 1, 2021. These changes were originally set to be implemented May 1 of this year, but the board chose to postpone in light of the COVID-19 pandemic.
These changes will place a $35 minimum bill on the General Service and Seasonal rate classes. This means that any members within these rate classes who get a bill for less than $35 will now see their monthly bill 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 General Service and Seasonal accounts that use less than 50 kWh per month. In other words, accounts with very low kWh use are not being billed enough to cover the fixed costs incurred to serve them.
Our goal in setting rates is to make them as fair as possible for all members. We want to ensure rates are based on the costs to serve our members, and that one group of members is not subsidizing another group of members. This $35 minimum will help us better manage that goal for the benefit of all our members. As a not-for-profit electric cooperative, our rates are set to allow for 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 lots of fixed costs involved. It requires employees, equipment and technology to maintain the power lines that serve your location behind the scenes, regardless of whether you use electricity in a given month 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.
You can read Medina EC's current tariff and view other important cooperative documents at MedinaEC.org/CorpDoc. Rates for all rate classes can be viewed at MedinaEC.org/Rates. If you have questions about whether these tariff changes could impact you, please contact us at 1-866-MEC-ELEC or Info@MedinaEC.org.