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Co-op Business


“The rate restructuring gives members a greater ability to reduce their overall costs—and OEC's costs—by shifting energy-use to off- peak hours.”


recovering the cost of service, OEC wants to minimize the impact on members. OEC’s cost of providing


service to customers is not related to the amount of energy used. Power cost is a "pass-through" charge based on the price of purchasing power from the generation and transmission cooperative. Te service availability charge recovers a portion of the local cost of doing business, like maintaining power lines, trimming trees, and processing bills. Instead of fluctuating based on kWh use, the service availability charge is a flat rate; regardless of how large or small a member's power usage is, all members are equal.


Q. What about the on-peak and off-peak summer monthly energy charges?


A. OEC purchases its power from a wholesale supplier cooperative. Power suppliers must be prepared to provide generation capacity sufficient to meet peak load (the greatest amount power needed at one time), which for Oklahoma occurs in the summer. OEC pays a monthly demand, or capacity charge, based on summer peak usage. As members


8 November 2013


move usage from on-peak hours to off-peak hours, OEC sees a significant reduction in purchased power costs. Tis is the driver behind the existing TOU rate structure.


Te difference between on- and off-peak energy charges does not reflect the full impact of on- peak usage. Because OEC wishes to minimize the impact rate changes may have on members, it has been phasing in TOU rates. With this rate change, OEC is taking one more step toward reflecting the actual on- and off- peak cost differences.


Q. Are the new rates better for me than existing rates?


A. OEC believes the new rate structures are superior to the existing rate structures. In the case of residential rates,


the increased service availability charge recovers more fixed costs from the fixed month charge. Te new TOU rates give members increased control over their power cost. Increasing the on-peak energy charge gives a strong pricing signal to members to reduce peak load. Under the new rate, members will save 15 cents per kWh by shifting usage to off-peak hours.


Reducing peak load not


only reduces cost but is sound environmental policy because it will postpone the need to build new generation facilities. For more information about


how to reduce on-peak usage visit TogetherWeSave.com.


Q. What about service charges like disconnect or collection fees?


A. OEC is not changing service charges at this time.


Q. Why are the customer- related costs and charges at some utilities higher than at others?


A. Rural electric cooperatives like OEC have about the same cost per mile to build and maintain power lines as other utilities, but we have far fewer connected meters per mile of line from which to recover this fixed customer-related cost. Te per-person shared cost of service decreases when a system has more members.


Q. How can I get more information?


A. OEC encourages members with questions to contact the customer service department at 405-321-2024.


—CEO Max Meek


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