Unbundled rate structure goes into effect
A new unbundled rate structure goes into effect for energy used in April and will be reflected in May bills with a new bill format.
Restructuring rates and unbundling the monthly billing statements were key considerations in a recent detailed study. Currently, some line items on your energy bill are made up of a handful of detailed expenses, or are “bundled” into line items. The unbundled bill breaks these items down into defined parts.
This change takes your cooperative toward a more cost-based approach, and provides members more information and improved transparency about energy costs. Ultimately, it is fairer and more equitable to all members. The new structure also allows members to reduce their energy use without impacting the revenue the cooperative needs to operate efficiently, make needed system improvements and to keep our systems safe and reliable.
The unbundled bill details the energy costs—including generation and transmission—and our distribution costs in separate sections.
For many years, it has been common practice for utilities to recover a portion of “fixed costs” in per kilowatt-hour or per-therm energy charges. Jo-Carroll Energy’s former rate structure followed this method. Revenue collected through the energy charge is dependent on sales that fluctuate with changes in weather, economic conditions, lifestyle choices and energy efficiency practices.
By separating these costs into the monthly flat charges of the facility charge and member service charge, the co-op can better plan and manage operations when the revenue needed to provide for these costs is not dependent on use. The two flat monthly fees do not completely recover our costs as determined by the cost of service study; that is why you also see the per-kilowatt or per-therm delivery charge.
These are not new items we are charging for—you have been paying them all along. The new bill design makes it easier to see and to know where your energy dollars are going.
This does mean that the minimum monthly charge increases. Formerly, the monthly minimum was the facility charge. The majority of our members are single-phase electric accounts, and the minimum was $26. The new minimum, if no electricity is used, is now the combination of the facility charge and the member service charge, or $33 per month. We recognize this will result in an increase to the total monthly bill for our members with smaller than average use. Other accounts, due to the changes in the energy charges, will see a decrease in the total bill.
Compared to other cooperatives in Illinois, this is close to the average monthly charge. Some cooperatives are in the $40 to $50 range, or higher.
Visit the Frequently Asked Questions page for more information.
Information about the rate restructuring and bill redesign has appeared in several issues of Hi-Lines.