New Rates will be Effective Jan. 1, 2019
United Power’s Board of Directors approved a rate change for 2019 that separates energy and demand charges and includes a modest 1.5-2% rate increase for most members. The new rates will be effective with January 1, 2019 electric use, so members will see these changes reflected on their February 2019 bills.
Since the cooperative began using the advanced metering infrastructure several years ago, we are now able to better measure every member’s impact on the electric system. The new rates break apart the blended rate members have paid in the past, incorporating both an energy charge and a demand charge.
The new rates allow United Power to more fairly charge members for both their energy consumption and their impact on the delivery grid.
“We always weigh multiple factors when considering a rate change,” stated Dean Hubbuck, Director of Power Supply and Rates. “The board takes several months to really evaluate our extensive cost of service study, and then considers our budget when setting rates for the coming year. We are pleased that the rate increase is small, and that members will have more ways to manage their energy bill.”
There have been multiple articles in previous issues of the United Newsline talking about how demand is determined, and how to reduce it. Additionally, the actual demand was added to most bills earlier this year with a zero amount, so members could begin to see how their actions affect their demand.
The new rate structure will assign a one-dollar per kW charge to the demand component, and members will see a corresponding drop in the cost of the energy. Now members can affect their electric bill in two different ways – reducing their demand by staggering their use of appliances and by simply using less energy. So, while rates are increasing next year, the change in the rate structure gives members more power to control their bill than in the past.
The changes to the rates affect all existing residential, time of use and small commercial rates. The rate change also includes the addition of a new Smart Choice Rate that takes the demand concept a step further.
This new Smart Choice Rate provides two different peak demand charges, and a much lower energy charge than with any other rate. The higher demand charges and lower energy charges may work well for a member who is willing to shift their demand throughout the day and night, and actively monitor their use.
In the past year United Power has rolled out access to the Power Portal, a way for members to look at their energy use in near real time (Read more about the Power Portal). The portal provides information about how the member is using power in 15-minute increments. This is a powerful tool to help members manage their energy use and see how they are impacting the power grid. Used in tandem with the demand rates, the Power Portal will provide the information members need to make good energy choices.
“By using the Power Portal and monitoring how they use appliances in their homes, members will have a greater ability to manage their energy costs than at any time in the past,” stated Hubbuck. “We think we have a new rate structure that really meets the needs of our members – whether they want to take an active role in keeping their costs down, or if they simply want a fair rate they don’t have to think about.”
You can fill the same 5-gallon bucket with either a garden hose, or a fire hose. A garden hose will not fill as quickly – but the hose costs less to operate, and the impact on the water system is minimal. Fill that same bucket with a fire hose, and it will fill up very quickly, but the surge of water from a fire hose requires larger pipes and a more expensive hose. In the end, both buckets would be full with the same amount of water, but filling a bucket more slowly – smoothing the water use over time – creates less demand on the system and costs less to do.