Recently Announced Rate Change Takes Effect Jan. 1, 2024
Last month, United Power announced a rate increase taking effect Jan. 1, 2024, and while it is never easy to hear about prices going up, electricity remains one of the best values in most households. Today’s modern household is powering more appliances with electricity. It provides warmth, safety, sanitation, and entertainment. Consider what was in your home just ten or twenty years ago. How many televisions do you have today, compared with how many were in your home growing up? How many connected devices like laptops, tablets, or phones are charging in your home every day? Even something like air conditioning, which was not a standard feature in Colorado homes twenty years ago, is making the modern household more comfortable.
When people talk about the rising cost of electricity, they often fail to notice how much more they are using. Rates at United Power have not changed since Jan. 1, 2020. During the pandemic and through the many months while inflation was running rampant in everything our members need to live — from groceries to gas — United Power rates did not change. Advanced planning was one of the key reasons we were able to hold rates steady during that period — from existing orders of heavy equipment and vehicles to belt-tightening in every function at the cooperative. United Power was able to provide stable rates while our members navigated rising prices on everything they need for their households.
The Colorado Sun recently reported on the cost of the five most common grocery items Colorado households purchase — milk, one pound of hamburger, a loaf of bread, a dozen eggs, and a pound of coffee. They reported that over the last five years the cost of these items has risen 35%. The price of many goods has been impacted by increases in transportation costs, labor, and raw ingredients. Any homeowner who was lucky enough to lock in a low interest home loan is still seeing their monthly payment rise due to increases in property taxes and homeowners’ insurance. All of those factors also impact your utility.
Keeping the system operating efficiently and making sure we can replace and upgrade equipment where necessary are adding to our operational costs. Consider when we need to purchase land for a substation to serve a new neighborhood; United Power is paying higher and higher prices to acquire land for this development, and all those costs are paid through the rates members pay for electricity.
One of the most powerful things about being served by a cooperative is that United Power is a not-for-profit entity. The cooperative does not work for shareholders who want to see profits. Anything collected above what we need to operate is considered patronage capital — and is eventually returned to members as capital credits. United Power serves its members with the goal of providing reliable electricity without an eye on profits.
I remember my second day on the job at Central Vermont Public Service when the process of setting electric rates was explained to me by the utility’s head of ratemaking. My head was swimming with numbers when the CEO, Tom Webb, whom I had never met, popped into the room. Shaking his head, he told me the only thing I needed to know about rates is to keep them as low as possible and always at or below the rate of inflation.