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Frequently Asked Questions about Rates

Frequently Asked Questions about Rates

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 now show it separately to make the bills more informative for those who wish to know exactly how their bills are calculated.

Q2. What is the “Power Cost Adjustment”?

A. The “Power Cost Adjustment” tracks the highly variable components of wholesale power cost and represents the change in the wholesale costs since the base retail rates were calculated, which last occurred in 2010. 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 now show it separately to make the bills more informative for those who wish to know exactly how their bills are calculated.

Q3. Why are “seasonal” and “time-of-use” base rate options being offered?

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. Offering rate options that better reflect the actual market costs of electricity is a way to give members the opportunity to take advantage of times when electricity prices are lower than average.

Q4. Why are the rates so different under the “seasonal” option for the different seasons of the year?

A. In reality, power costs vary significantly at different times of the year relative to the principles of supply and demand.  They are higher during summer and winter; lower during spring and fall. The “seasonal” rate option gives members a better indication of true seasonal power costs.

Q5. Why would anyone want to select the “seasonal” pricing option?

A. Because of their electricity usage patterns, the “seasonal” pricing option will allow some members to save money on their total annual bills.

Q6. 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.

Q7. Could I select the “seasonal” rate option, and also select budget billing in order to keep my payments from fluctuating so much on a monthly basis?

A. Yes. The bills under the seasonal rate option tend to vary significantly from month to month and season to season. Budget billing is a good way to take advantage of “seasonal” pricing without having to deal with large swings in your monthly payments.

Q8. 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 greater demand, which typically occurs during weekday afternoons and evenings in the summer, and weekday mornings and evenings in the winter.

The “time-of-use” option allows members who wish to better manage their bills to save money by shifting some of their electrical consumption into the hours of the day when electricity costs less.

Q9. 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.

Q10. 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.

Q11. Can I choose 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.

 

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