Power Costs, Maintaining and Investing in Our Infrastructure, and Increased Cost of Doing Business Drive 3.1.23 Rate Increase
One of the responsibilities of operating an electric system is to provide safe, affordable, and reliable service at a reasonable rate. At Yampa Valley Electric Association (YVEA), our rates have remained among the lowest amongst co-ops for many years. While it is never favorable to raise rates, YVEA’s Board of directors voted to increase rates based on several factors - power supply rate increases, maintaining and investing in our infrastructure, and the cost of doing business. They made this decision based on YVEA’s goal to effectively operate a safe and reliable electric system.
As virtually all aspects of today’s cost of living continue to rise, YVEA has done its best to avoid the cost of service adjustments. Over this same period, we have experienced steep increases in our cost to do business (materials, labor, etc.) Therefore, our Board of Directors has approved a rate change to remain fiscally healthy and ensure fairness across rate classes.
This rate change will take place starting on March 1st, 2023 electricity usage.
Below are some frequently asked questions and rate charts.
2023 Rate Increase FAQ
The rate classes that will be impacted are Small General Service, Medium General Service, Large General Service, Outdoor Lighting, and Irrigation. Please see the charts below for more details:
In 2022, YVEA performed a Cost of Service Study (COSS), which showed us whether each customer class (residential, commercial, and industrial, for example) are adequately covering the costs of service, fuel, labor, equipment, etc. to serve those members. Based on the study and the 2023 rates from our power suppliers, we are raising rates to distribute costs equitably to our members. Several factors went into this decision. Here are the main drivers for the rate increase:
- Power Supply Costs: Xcel energy is raising our wholesale power supply rate by 14% for 2023. Wholesale power costs comprise almost two-thirds of all YVEA expenses, so this increase significantly impacts YVEA’s rates.
- Maintaining and Investing in Our Infrastructure, which includes:
- Construction Workplan –Every year, we invest millions of dollars back into the system, which improves our system reliability for all members
- Wildfire Mitigation – As our summers see less precipitation, we need to make sure our system helps aid in the prevention of wildfires. This includes tree trimming projects, installing more electronic reclosures, and upgrading our system so we can switch to Fire Protection Mode as quickly as needed.
- Investing in a responsive grid – We are continually upgrading our system to decrease outages’ frequency, duration, and response time, and the only way to achieve this is by investing in digital technologies. We are building a smarter grid that will help to provide even greater reliability to our members.
- The Rising Cost of Doing Business: Just like our members, we are seeing increased costs affecting how we operate, and our dollar is not going as far as it once was. For us to continue to successfully run YVEA and deliver safe, reliable, and affordable power, we need to take these costs into account when budgeting for materials purchased, maintaining our fleet, hiring and retaining skilled staff who can help us maintain and support our infrastructure, and the increased cost of living, to name a few of the factors that make up the rising costs of doing business.
YVEA last raised rates in June of 2022.
As a not-for-profit co-op, we give our profits back to our members, which happens in the form of Capital Credits. So our profit margins are not going towards bonuses or dividends to shareholders – it goes back to our members, the ratepayers.
Yes. Please see the rate charts above for the specific System Access Costs.
The System Access Cost is a fixed monthly charge that recovers some of the fixed costs that come directly from serving an individual member, regardless of how much electricity is used. These costs include the cost of the meter, wire, and other equipment used to deliver electricity to the home or business, as well as billing expenses, such as meter reading, bill preparation, and postage. Even if you do not use any power from us, there is still a cost to operating and maintaining the grid that serves you. The system access cost covers these costs.
When we received word of this larger than previously described increase from Xcel, YVEA was creating our budgets for 2023. All departments and team members were asked to cut their proposed budgets by 15% to help lessen the impact of these rate increases from our power suppliers. Top of mind while we were making these cuts was how YVEA would maintain our commitment to providing our members with safe, reliable, and affordable power. We were confident we were able to trim budgets to the point where we could achieve this promise to our members. Further, these budget cuts enabled us to lessen the impact of the passthrough costs of Xcel’s rate hike on our members. While Xcel raised our rates 14%, thanks to the reduction of our proposed 2023 budgets, we have not needed to raise our rates to match that 14%.
We cannot control the costs Xcel passes on to us, their business decisions, or any other factors that come from power supplier rate increases. The vulnerability this creates for our membership motivated us to request proposals for new power suppliers. We are seeking long term contracts that will provide stability for our evolving cooperative. What we are hoping to gain from this RFP is the chance to either work with our existing power supplier or a new one, to better serve our communities by providing safe, reliable, and affordable energy.
These new rates go into effect on March 1st, 2023. Starting on March 1st, your energy usage will be billed at this new rate.
If you visit https://www.yvea.com/energy-hero we have tips and tricks on how members can help fight energy waste. During our colder months, we see the two biggest energy wasters: electric heat tape and space heaters. Our Energy Hero page offers advice on how best to use these two products while also helping to lower your winter bill.
There are several options. Your best one is to call our Member Services team at 970-879-1160. They can work with you on paying your bill, advise you on our Budget Billing process, or help you connect with local agencies offering assistance. The bottom line is – don’t wait to ask for help. We want to help our members, so please call us.
The YVEA Board of Directors considers necessary rate changes each year. We anticipate another rate change in mid-2024 to match the proposed rate increase from our wholesale electricity provider, Xcel Energy.