Rate Adjustment Takes Effect January 1st
A recent cost of service study revealed a wide gap between OEC’s true fixed costs and our rates’ fixed costs. As a result, the service availability charge will increase from 75¢ to 83¢ per day, effective Jan. 1, 2018.
“According to that same cost of service study, our service availability charge should be $53 per month – or about $1.77 per day,” said Patrick Grace, CEO. “Currently, that charge is 75¢. When the increase takes effect, it will be 83¢, which is still less than half what it should be.”
WHAT ARE FIXED COSTS?
Almost all of OEC’s operating costs are fixed. Whether a member uses one kilowatt hour (kWh) per month or 1,000 kWhs, the same amount of infrastructure and materials are needed to provide electricity. In addition, linemen, bucket trucks and maintenance dollars are needed on a daily basis to ensure that infrastructure operates reliably and efficiently, which can be difficult in unpredictable Oklahoma weather. These are all fixed costs for OEC and, again, are all needed no matter how many kilowatt hours our members use.
“Electric consumers in general believe we should pay only for what we use,” Grace continued. “It takes a very big investment to provide electricity, but our rates do not currently reflect that.”
WILL PART OF THE RATE DECREASE?
In order to keep the rate adjustment from being a rate increase, an area of OEC’s residential and small commercial rates will see a price decrease. Bills mailed in May are now part of the winter rate — a large decrease in kWh charges from the shoulder rate. The winter rate saw a reduction of over half a cent per kWh in 2017.
“The reduced per kWh rate in excess of 1,000 in the winter means an abundance of potential savings for all-electric homes,” said Grace. “Plus, all members could see savings as a result of their May bills being part of the winter rate.”
It’s important to remember — like all products, goods and services — costs will continue to rise: production costs, delivery costs, materials and maintenance costs, etc. OEC continually evaluates all options and works hard to ensure members are paying a fair and reasonable price for their electricity.