Frequently Asked Questions about New Rates as of November 2010

Q1. What is the “Basic Service Charge”?

A. The “Basic Service Charge” is billed to offset the cost of making electricity available to any particular service location whether or not any electricity is used. It helps pay for administrative costs and the carrying costs for a meter, a transformer, service wires, and the backbone system that makes power available. We have always had a “Basic Service Charge,” often called a “Facilities Charge,” although on the bill it used to be included in the “Energy” charge rather than being shown as a separate item. We’re trying to make the bills more informative for those who wish to know exactly how their bills are calculated.

Q2. Why is the “Basic Service Charge” increasing so much?

A. Our current $15.00 charge hasn’t changed since 1998 even though expenses have gone up significantly. The increase to $18.00 followed by a subsequent increase after two years to $20.00 will more closely reflect actual costs of service.

Q3. What is the “Power Cost Adjustment” that shows on the new bill statement?

A. The “Power Cost Adjustment” tracks the highly variable costs of wholesale power cost and represents the change in the wholesale costs since the base retail rates were calculated, which last occurred in 1998. We have always had a “Power Cost Adjustment,” although it used to just be included in the “Energy” charge rather than being shown as a separate item. We’re trying to make the bills more informative for those who wish to know exactly how their bills are calculated.

Q4. Why are new rate options being offered at all?

A. As energy prices continue to rise, many people are looking for ways to better manage their energy use and their out-of-pocket costs. Along with incentive programs for upgrading heating and cooling equipment to be more efficient, offering rate options that better reflect the actual market costs of electricity is another way to give members information, options, and choices.

Q5. Why are the rates so different under the “seasonal” option for the different seasons of the year?

A. Power costs, in reality, vary significantly at different times of the year relative to the principles of demand and supply. The “seasonal” rate option gives members a better indication of true power costs.

Q6. Why would anyone want to select the “seasonal” pricing option?

A. For some people, the “seasonal” pricing option will save them money on their total annual bills.

Q7. How would I know if the “seasonal” option would save me money?

A. We would be happy to analyze your past consumption history and let you know if it would have saved you money in years past. If you anticipate your consumption pattern staying about the same, this analysis would give you a good idea about which option would most likely work to your advantage. Actual results would be impacted by any changes in your electric utilization habits or significant weather deviations.

Q8. Could I select the “seasonal” rate option, and also select budget billing in order to keep my bills from fluctuating so much on a monthly basis?

A. Yes. Monthly bills under the seasonal option will tend to vary greatly from month to month and season to season. Budget billing would be a good option if you expect that “seasonal” pricing would work to your benefit, but you would not want to see large swings in your monthly bills.

Q9. What is the “time-of-use” rate option?

A. The “time-of-use” option gets even closer to the true cost of electricity as it changes, not only from season to season, but also by the time of day. Electricity costs more when it is in great demand relative to the available supply, similar to any other commodity.

We will be discussing the time-of-use option more when it is closer to the time when it becomes available.

Q10. When will the “time-of-use” option be available?

A. We expect it to be available by mid-2011. We first have to have administrative tools in place that will allow us to bill this option.

Q11. What would I do if I wanted to try one of the new options?

A. You would sign an agreement to be billed under the option you select, agreeing to be billed under the pricing option for a twelve-month period.

Q12. What if I try the “seasonal” or the “time-of-use” rate option and don’t like it?

A. Members typically may choose a new rate option every twelve months during a thirty-day window. Members who try one of the new options for the first time may choose a different option after a trial period of only six months.

Q13. Can I just stay on a flat base rate that stays the same year-round?

A. Yes. Unless members elect the “seasonal” option, they will stay on the flat base rate that stays the same year-round.

Q14. Why are security light charges going up?

A. The charge for a standard 100 Watt security light is increasing from $6.00 to $7.00 per month. It hasn’t changed since 1998 even though power costs and other expenses have risen significantly since that time.

Q15. Why are miscellaneous charges going up?

A. The charges haven’t changed since 1998. The increases reflect the rising costs that we have all experienced since that time.