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Basic Service Charge and Wholesale Power Cost Adjustment will Increase for 2017

Crow Wing Power members will see a basic monthly service charge and rate increase in 2017.  The average residential member will see a 5.1% increase.  The new rates will be reflected on February’s bills for January’s electric use.

This increase is mainly due to the fact that Crow Wing Power’s wholesale power rate is projected to increase 12.5% from Basin Electric and 7% from Great River Energy. The Board of Directors reviewed all options at their November annual review and planning session.  At the December Board meeting, they determined a basic service charge increase and slight wholesale power cost adjustment was in the best interest of all members.

The basic service charge for residential members will increase from $18.00 to $22.00.  The wholesale power cost adjustment (PCA) will increase from 3.9¢ to 4.0¢/kilowatt hour (kWh).  The summer PCA will also increase .05¢/kWh to 1.5¢/kWh (for the months of June, July and August) when wholesale power costs are higher.


This dollar graphic depicts where your dollar will be spent, based on projections for 2017.  Purchased power from our wholesale power suppliers has always been a very large percentage but over the years it continues to grow.  Maintenance and operating expenses have remained relatively stable for many years and we strive to keep our operating margins as low as possible as a not-for-profit cooperative.

 


 

Questions and Answers on the Basic Service Charge

 

Q. What is the Basic Service Charge?

  • The monthly fee recovers a portion of the local co-op cost of delivering electricity to members.  Part of our “fixed” costs are also collected through the kilowatt hour (kWh) charge.
  • It’s similar to monthly fees that other utilities charge.

 

Q. What specifically are members paying for with the basic charge?

  • Crow Wing Power delivers electricity using 60,500 power poles.  The poles are inspected and maintained on a regular schedule and are replaced when necessary, sometimes unexpectedly.
  • It takes more than 29,000 overhead and underground transformers to convert the high-voltage electricity on our system to voltage levels that power members’ homes and businesses.
  • Crow Wing Power maintains more than 5,000 miles of overhead and underground line.
  • The Cooperative’s 23 substations are essential to moving electricity at different high-voltage levels across our system.
  • Building, operating and maintaining our system requires the use of about 25 large vehicles, with specialized hydraulic equipment, at an average cost of $225,000 each.

Overall, changes in the electric industry are causing utilities to examine the way they recover their fixed costs.  Crow Wing Power continues to respond by striving to adopt a basic charge that accurately reflects the cost of delivering power to our members and methods that are fair for all members.

 

Q. My Electric Use is Lower than Most.  Why Isn’t My Service Charge Lower?

  • If one member uses only one kWh of electricity and another member uses 1,000 kWhs, the Cooperative still incurs the same cost to build the line, maintain the distribution system and deliver electricity to both members. 

 

Q. Why are Crow Wing Power’s Basic Service Charge and Rates higher than some neighboring utilities?

  • Crow Wing Power’s basic service charge and rates compare favorably to other neighboring cooperatives.  In fact our new $22.00 basic service charge is still lower than the average basic service charge of six neighboring electric cooperatives, in which the average was $28.54/month. Crow Wing Power serves mainly rural areas, unlike municipal utilities that have more populated cities and towns.   The neighboring investor-owned utility, back in the 1930’s, chose not to provide electric service to the less populated rural areas because it was more costly.  That’s why rural electric cooperatives were formed. 
  • According to Minnesota Rural Electric Association (MREA) investor-owned and municipal utilities that serve higher density areas typically average between 38 and 48 consumers per mile.  The higher density helps offset the monthly costs for equipment like poles, wires, transformers and maintenance as well as provide service to consumers.
  • Crow Wing Power has only eight members from which to recover the investment of $55,000 to build a mile of single-phase line.  In contrast a municipal or investor-owned utility could recover that cost from 38 to 48 consumers.



 

Rates

Residential Energy Charge

First 2500 kwh/month 10.9 cents (includes PCA)
Excess 10.5 cents (includes PCA)
Basic Charge $22 per month
Summer (June, July, August) Additional PCA increase of 1.5 cents/kWh

Commercial Industrial

(not to exceed 50Kw billing demand)

Energy Charge 10.9 cents (includes PCA)
Excess 10.5 cents (includes PCA)
Demand Charge No Charge
Basic Charge $22 per month
Summer (June, July, August) Additional PCA increase of 1.5 cents/kWh

Large Power  

(50Kw billing demand and larger)

Energy Charge 6.87 cents (includes PCA)
Demand Charge $11.14 per Kw
Basic Charge $24 per month

Irrigation

Energy Charge 8.3 cents (includes PCA)
Demand Charge $12.00 per Kw or Off Peak $4.00/Kw

Dual Fuel

Energy Charge 5.6 cents (includes PCA)

Off Peak

Energy Charge 4.45 cents (includes PCA)

 

 

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