Deciphering changes to your bill

Posted on Jan 04 2020 in Kankakee Valley REMC

Kankakee Valley REMC is focused on providing safe, reliable electricity to our member-consumers in the most fiscally responsible way. To accomplish that, we regularly review our rates to ensure we are recouping our costs through our rate structure. In last month’s issue of Indiana Connection, we mentioned our recent rate study. As a non-profit cooperative, we strive to be revenue-neutral.

When conducting a rate study, we compare the rates we charge you, the member-consumer, to the cost of buying and delivering electricity. We want our rates to closely match what it costs to provide you power. 

During this recent rate study, we determined that there was no need to increase rates for residential member-consumers. Most residential member-consumers are using less electricity, thanks to energy-efficient appliances and lighting options. Electric generation has also shifted from coal to sources like renewables and natural gas. That has decreased generation costs. 

Although rates for residential member-consumers will not increase this year, commercial and industrial rates have changed. Our wholesale power supplier, Wabash Valley Power Alliance, has increased its demand charge and reduced its energy charge. 

“Demand” is part of all member-consumers’ monthly electric bills. The difference in a residential and a commercial and industrial account is the amount of demand used. The variation in a residential member-consumer’s demand is very small. On the other hand, a commercial and industrial member-consumer’s demand fluctuates based on the equipment needed to operate on a given day. Due to this variation, we must have infrastructure in place to ensure we meet the capacity requirements of our commercial and industrial member-consumers. It is our goal to ensure the facilities used by our commercial and industrial member-consumers are built to meet their needs and maintained to the highest level. Commercial and industrial member-consumers will see a decrease in their energy charges and an increase in demand charge to better align with our wholesale costs. 

All member-consumers will see a change to the power cost adjustment. The electric bill you receive each month lists several charges, including a power cost adjustment. Through this charge, the bill is adjusted to reflect increases and decreases to the cost of electricity from our wholesale supplier — without having to change the rate throughout the year. Through the rate study, the current power cost adjustment has permanently been included in the energy rate. This allows the power cost adjustment to be reset to zero. The result is no change to what residential member-consumers pay per kWh. 

The rate increase and the change to the power cost adjustment will take effect on the bill you receive in February for your January use.

If you have any questions about the bill changes or about how the cost of your service is computed, please give us a call. We’ll be happy to help!

Your electric cooperative is run by a democratically elected board of directors. If leading your electric co-op interests you, consider running for directorship at the 2020 annual meeting to be held on June 4 at the Porter County Expo Center.