From the Top, CEO Patrick Grace
I hope your holiday season has gotten off to a great start. As our annual events wind down at OEC, we've been looking ahead to next year and working hard to ensure we're constantly improving our members' quality of life through the safe delivery of highly reliable, reasonably priced electric service, innovative energy programs and exceptional member service. In order to do that, we have tweaked the 2018 residential and small commercial rate. Beginning Jan. 1, the service availability charge (SAC) is increasing from 75¢ per day to 83¢ per day. To keep it from being a rate increase, we have decreased another part of the rate — the May bills will now be included in the winter rate...our lowest rate.
Why did we make these adjustments to the rate? If you've been reading my column long, you'll know the methods by which we as members are currently charged for electricity are not at all reflective of the true costs of providing power. This is true for the electric industry as a whole. As regulations have forced the industry to find new, cleaner methods of producing power, it has simultaneously forced electric providers to change how that power is billed. You see, nearly 70 percent of the components that make up our electric bills is comprised of fixed costs. These costs, which include maintaining and improving existing infrastructure, will occur whether we use 1 kilowatt hour (kWh) per month or 2,000 kWhs. It costs a lot of money to ensure our lights come on when we flip the switch.
These fixed costs are ideally covered in the SAC, but many electric providers, OEC included, don't charge at all what cost of service studies say we should. Perhaps the biggest factor in determining our electric rate is the single hour of the entire year your home consumes the most energy — typically a summer afternoon. The amount of power your home uses during that single hour determines the amount of power we have to have available and ready for use year-round. It's what makes electric rates a little complicated but something our board, our power provider Western Farmers Electric Cooperative and myself are dedicated to getting right every year.