2022 Rate Study
Rate study summary and proposed rate adjustment
In August 2022, we informed our members that Sumner-Cowley Electric was undergoing a rate study – a process that evaluates the Cooperative's costs of providing electric service and rates charged for this service. The purpose of this study was to (1) identify the overall revenue needed to cover Sumner-Cowley Electric ’s operating expenses and debt obligations while generating enough capital to reinvest in our electrical system and (2) review the cost of providing service to each individual rate class (i.e., Residential, Commercial, Irrigation, etc.). This study, performed by an outside independent rate consultant, has now been completed.
The full study results were presented to the Board of Directors at the August regular monthly board meeting. The study, which utilized a test year of 2020, showed that overall electric rate revenues should be increased by approximately $300K or 2.62%. The proposed change, if approved is set to take affect January 1, 2023
The most recent rate change for the cooperative occurred in 2017. Prior to that, rates had not been increased since 2004. As a member owned cooperative, we are very mindful of our duty to responsibly spend cooperative funds. However, we have seen dramatic increases in wholesale power, building and repairing the electric distribution facility, wages and benefits and the overall cost of doing business, making a revenue increase unavoidable. It is our intention to annually review the revenue requirements of your cooperative to minimize future increases. Changing the mindset of infrequent larger increases to smaller and possibly more frequent need for adjustments to properly address the financial needs of your cooperative.
The first initiative of the proposal is to increase the facility charge which is designed to recover those costs which do not vary with the amount of energy used- otherwise known as the fixed cost to provide service.
Every member of Sumner Cowley Electric utilizes the electric system in a different and unique way. One of the goals of the proposed rate change was to align cost cause more precisely with cost recovery. In 2018, Sumner Cowley Electric installed Advanced Metering Infrastructure (AMI) that allows us to obtain additional reading metrics on residential meters that were previously only typically available on commercial and industrial meters. Accounts that have not previously been charged demand were sent a statement stuffer with their September bill drawing their attention to the new reading of KW (demand) on their bill as an effort to begin educating the membership on their specific utilization of the distribution system. Residential, Residential Electric Heat, Non-Residential and General Service Small (GSS) as part of the proposal, will be charged for the highest demand reading within each monthly billing period.
The cooperative’s average cost of wholesale power varies monthly depending largely on both the seasonal demand charges and fuel cost adjustment from its power supplier. The coop uses a Power Cost Adjustment (PCA) clause to pass along these fluctuations in wholesale costs. This PCA appears on your bill as a separate line item as a charge or credit applied to your monthly energy use based on the difference between the coops monthly cost of power and the established base cost of power. The rate case study produces a new base cost of power to be used in this calculation moving forward. The new base cost of power used in the study is 6.934 cents per kWh. When the monthly wholesale power cost is greater than this base, the PCA will be a charge and conversely, when the monthly wholesale power cost is less than this base, the PCA will be a credit.
The final component of the proposal is for the increase of the fee associated with the application for interconnection of member owned generation. The current nonrefundable fee is $200. The proposal requests an increase to $500 to more completely recover the time and resources expended by cooperative staff to ensure the safe interconnection of this equipment.
One part of the proposal is to increase the monthly Facility Charges to better align with the Cost of Service. This monthly flat charge that every member pays is designed to recover those costs that do not vary with the amount of electricity used. A portion of the Cooperative's costs are the same for customers within a rate class whether they use 50 kWh per month or 2,000 kWh per month. The Cooperative has made similar investments in poles, wires, transformers, and meters for most customers within the same rate class and incurs similar costs for reading meters, billing, and consumer accounting.
The table below gives an overview of the proposed rate changes by rate class. The percentages shown reflect the monthly bill impact for the average usage customer within the class. However, the effect to each member within each rate class will vary depending on individual consumption.
On Wednesday, October 26, 2023, the Board of Directors held a member rate meeting at the Wellington headquarters. Action on the proposed rates were taken at that time. The meeting was open to any member who wished to attend and hear the rate proposal presentation.
The Service Fees Rate Schedule provides a list of common service fees and other charges. If you have any questions about these fees or other fees associated with service, please call our office at 620-326-3356.
SERVICE FEE SCHEDULE
The following schedule of fees and charges shall be collected by the Cooperative in accordance with the provisions of Rules and Regulations.
Temporary Service Minimum Fee: $100.00
Meter Reading Fee: $25.00
Returned Check Charge: A charge not exceeding $30.00 or the maximum provided by K.S. | A. 21-3707
Collection Charge: $25.00 per account
Disconnection Charge: $25.00 per account
Reconnection Charge: $25.00 per account
Meter Test Fee: $30.00 minimum, but no less than the actual cost plus shipping and handling
Service or Trip Charges: $50.00
Security Light Repair Charge: $75.00 (minimum)
Security Light Maintenance Fee: $5.95 (one light) | $3.00 (each additional light at same location)
Monthly minimum for abandoned single phase services to avoid removal: Monthly rate classification facilities charge
Monthly minimum for multi-phase abandoned services: Case by case basis