Flathead Electric Cooperative approves new revenue neutral residential rate structure change
At their February meeting, the Flathead Electric Cooperative (FEC) Board of Trustees approved a 0% rate increase for all rate classes for the coming year. Additionally, they approved a new residential rate structure, which includes a new demand charge along with a reduction in the Co-op’s energy charge. This revenue-neutral change is designed to more fairly collect the Co-op’s costs and give members more control over their electric bills.
Over time, the way FEC is charged by its wholesale power provider, the Bonneville Power Administration, has changed. The Co-op now pays a premium for power used during peak hours. As a member-owned, not-for-profit Cooperative, FEC’s goal is to collect costs most equitably from members. With this rate structure change, most member’s residential bills will decrease or increase by less than 2%, depending on their demand required during the Co-op’s peak hours. Some FEC members will see their bills decrease since it costs the Co-op less to serve them power. Likewise, members with a higher demand could see a slight increase in their bill.
The demand charge of $0.26 per kilowatt is a charge based on the highest demand measured during the Co-op’s peak hours in each member’s billing cycle. Peak hours occur Monday through Friday from 7 to 10 a.m. and 5 to 8 p.m. (no weekends or major federal holidays). Respectively, FEC’s energy charge (the amount billed for each kilowatt hour (kWh) consumed) will decrease by 1.2% for the first 0-600 kWh, 1.9% for the next 601-3500 kWh, and 3.1% for 3501 kWh and above.
In addition to collecting costs more equitably, a demand charge gives FEC members another opportunity to control their bill. Previously, using less energy was the only way to reduce bills. Now, shifting energy usage to off-peak hours, and/or avoiding the simultaneous use of large appliances during peak hours will reduce demand and decrease bills.
For more information, or to use FEC’s residential rate calculator to see exactly how this change will impact your electric bill, visit www.flatheadelectric.com/demand.