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Visit us on the Internet at: www.vvec.com MARCH 2016


Published for the members of Verdigris Valley Electric Cooperative A supplement to Oklahoma Living


Rate Increase Effective May 1 By Clyde Willard


Beginning May 1, residential electric bills will be increasing. For the average residential ac- count that consumes 2,000 kWh per month, the increase will be approximately 40 cents per month for the summer bills and $10.80 per month for the winter bills. The actual percent increase will vary from member to mem- ber. The greater your electric usage is per month, the less of a percentage increase you will see. Several years ago, VVEC made a commitment to design rates that were more in line with the cost of providing electric ser- vice to each class of user. Begin- ning in 2015, VVEC conducted a new Cost of Service Study to determine what the current fixed cost was to provide electric service to each meter. The study determined that the fixed cost or “Customer Charge” to serve each residential meter should be $37.40 per month. The Customer Charge for a residential account per month is currently $25.00. In keeping with the commitment made several years ago to align rates closer to the actual cost of providing service, the Board of Directors made the decision to increase the monthly customer charge from $25.00 to $30.00. The Customer Charge will still


not be at the level it needs to be, but it will be closer to the study’s amount. Increasing the Customer Charge instead of the energy charge to recover increased fixed costs will result in residential accounts paying a larger share of the cooperative’s fixed cost through the Customer Charge instead of the energy rate. If the kWh charge would have been in- creased instead of the Customer Charge, more of the fixed cost would then have to be recovered through energy usage. Within the residential class that would have meant the larger electric users would have continued to pay a far


greater share of the fixed costs than the smaller users. In addition to the Customer Charge increasing, the winter res- idential kWh charge will change from a declining block rate to a single block rate. Instead of the energy rate declining for any kWh usage in excess of 1,000 kWh, the energy rate will be the same for all kWh billed. The focus is now on year-round energy con- servation.


For more information, please see the Rate Comparison chart on Page 3.


Clyde Willard is director of finance for VVEC.


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