As reported in previous issues of the magazine, Decatur County REMC has instituted a rate increase. The increase is based on the findings of a cost of service study done by the cooperative. The new rate will be reflected on May bills.
Who decides when a rate increase is needed?
DCREMC’s board of directors sets the cooperative’s electric rates. The board consists of members who pay the same rates you do. You and other members elect them each year.
Board members work to ensure electric rates are adequate to maintain financial stability, provide the revenue required for delivery of reliable electric service, and avoid subsidization among rate classes.
Who calculates the rate increase?
DCREMC’s board of directors hired an independent rate consultant to conduct a cost of service study (COSS). The COSS is a tool used to set the cooperative’s rates that fairly and equitably breaks down the costs of providing service to each rate class. The COSS offers guidelines to assist the board in responsibly allocating costs and helps design rates that ensure each rate class generates set revenue requirements while ensuring no class pays more than its fair share.
Rate design goals
- Fair and equitable rates.
- Each rate class pays the costs it imposes on the system.
- Fixed costs recovered through fixed charges.
- Variable costs recovered through variable charges.