2021 June NAEC Center Pages

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north arkansas electric cooperative

NAEC proposes new rates North Arkansas Electric Cooperative strives to provide our members with safe, reliable and affordable electricity. The co-op’s rates have remained steady for more than eight years. Challenges affecting NAEC’s financial condition in the past few years include limited membership and electricity sales growth as well as increased operating costs and inflation. Following industry best practices, the cooperative commissioned engineering consulting firm Toth & Associates to review our rates and determine if they are producing sufficient revenue. This is known as a cost-of-service study. As NAEC operates as a not-for-profit cooperative, we must generate operating margins to cover capital credit retirements to members, operating costs and principal on long-term debt while maintaining sufficient equity. The independent analysis determined NAEC needs to increase our retail rates, which have not changed since March 2013. The NAEC Board of Directors reviewed the cost-of-service study and, upon cooperative staff ’s recommendation, voted in favor of a rate adjustment to increase system revenue by 6.88 percent. NAEC will submit the rate adjustment request to the Arkansas Public Service Commission in June. If approved, it will go into effect with usage beginning Sept. 29. The 6.88 percent reflects the average increase among all rate classes – residential, commercial and lighting. As an example, the monthly bill for a residential member using 1,000 kWh would go from $124.46 to $133.44. NAEC will request an increase in the daily availability charge from $0.66 to $1.04 a day for single-phase service and from $1.21 to $2.09 a day for three-phase service. The daily availability charge helps cover the customer service expenses plus fixed costs, such as meters, transformers and lines, necessary to provide electricity to a service regardless of its usage. It often is referred to as a minimum bill and, if approved, would be $31.20 for a singlephase service and $62.70 for a three-phase service in a 30-day month. At the same time, NAEC has requested a decrease in our kWh charge for residential and small commercial services from $0.10466 kWh to $0.10224 kWh. If the request is approved by the commission, members on large power rates will see increased daily and demand charges along with decreased energy charges. In addition, NAEC plans to rebase the cost of energy and cost of debt adjustment revenues into the new kWh rates. These charges are reflected as either debits or credits on members’ statements each month. The cost-of-service study and the decision to propose these rates excluded all expenses and revenue related to the co-op’s fiber optic project.

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NORTH ARKANSAS ELECTRIC COOPERATIVE INC. NOTICE OF PROPOSED RATE CHANGES Notice is hereby given that the board of directors of NORTH ARKANSAS ELECTRIC COOPERATIVE, INC. has approved changes in the following rate schedules of this Cooperative as set forth below. The proposed rates are designed to increase system revenue by 6.88% . The effect of the rate change on individual consumers will vary depending on the class of service and the amount of electricity used. Rate/Block

Existing Rate

Proposed Rate

RATE SCHEDULE 3: LARGE POWER SERVICE - LP Adjustments to Energy Charges: Energy Cost Adjustment (/kWh) $0.00290 Cost of Debt Adjustment (/kWh) -$0.00267 Energy Charges: All kWh (/kWh) $0.05673 Energy Charges Including Adjustments Above: All kWh (/kWh) $0.05696 Daily Service Availability Charges: All Phases $2.52 Demand Charges: Summer kW $10.24 Winter kW $7.71 RATE SCHEDULE 4: SECURITY & STREET LIGHT SERVICE - SL Adjustments to Energy Charges: Energy Cost Adjustment (/kWh) $0.00399 Cost of Debt Adjustment (/kWh) -$0.00263 Monthly Lighting Charges: 62 Watt LED (175W MVL and 100 HPS Equivalent) $9.85 175 Watt MVL or 150W HPS $9.90 250 Watt HPS $15.49 400 Watt MVL or 400 Watt Metal Halide $15.59 400 Watt HPS $30.41 1000 Watt MVL or 1000 Watt Metal Halide $30.82 1000 Watt HPS $43.16 1500 Watt MVL $43.49 More co-op news on page 26

my co-op

RATE SCHEDULE 2: RESIDENTIAL & SMALL COMMERCIAL SERVICE Adjustments to Energy Charges: Energy Cost Adjustment (/kWh) $0.00267 -$0.00009 Cost of Debt Adjustment (/kWh) -$0.00258 -$0.00014 Energy Charges: All Summer kWh (/kWh) $0.10466 $0.10224 1-500 Winter kWh (/kWh) $0.10466 $0.10224 Excess Winter kWh (/kWh) $0.08394 $0.08152 Energy Charges Including Adjustments Above: All Summer kWh (/kWh) $0.10475 $0.10201 1-500 Winter kWh (/kWh) $0.10475 $0.10201 Excess Winter kWh (/kWh) $0.08403 $0.08129 Daily Service Availability Charges: Single Phase $0.66 $1.04 Three Phase $1.21 $2.09

$0.00014 -$0.00023 $0.05615 $0.05606 $5.50 $11.24 $8.71

$0.00123 -$0.00019 $10.57 $10.57 $16.64 $16.64 $32.88 $32.88 $46.39 $46.39

Continued, Page 26

NORTH ARKANSAS ELECTRIC COOPERATIVE

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north arkansas electric cooperative Continued From Page 23

NORTH ARKANSAS ELECTRIC COOPERATIVE INC. NOTICE OF PROPOSED RATE CHANGES Notice is hereby given that the board of directors of NORTH ARKANSAS ELECTRIC COOPERATIVE, INC. has approved changes in the following rate schedules of this Cooperative as set forth below. The proposed rates are designed to increase system revenue by 6.88% . The effect of the rate change on individual consumers will vary depending on the class of service and the amount of electricity used. Rate/Block

Existing Rate

Proposed Rate

RATE SCHEDULE 5: LARGE POWER SERVICE - OFF PEAK* Adjustments to Energy Charges: Energy Cost Adjustment (/kWh) $0.00000 Cost of Debt Adjustment (/kWh) $0.00000 Energy Charges: All kWh (/kWh) $0.05193 Energy Charges Including Adjustments Above: All kWh (/kWh) $0.05193 Daily Service Availability Charges: All Phases $1.66 Demand Charges: All kW $1.37 RATE SCHEDULE 17: LARGE POWER SERVICE - OPTIONAL Adjustments to Energy Charges: Energy Cost Adjustment (/kWh) $0.00382 Cost of Debt Adjustment (/kWh) -$0.00256 Energy Charges: All kWh (/kWh) $0.057041 Energy Charges Including Adjustments Above: All kWh (/kWh) $0.058301 Daily Service Availability Charge: All Phases $4.13 Demand Charges: All Billing kW $0.28 All Coincident Billing kW $10.52

$0.00000 $0.00000 $0.00000 $0.00000 $0.00 $0.00

$0.00106 -$0.00012 $0.05615 $0.05709 $5.50 $1.00 $12.44

*Rate Schedule 5: Large Power Service - Off Peak to be discontinued

The above proposed rates as well as those on page 23 will become effective for bills rendered on or after November 1, 2021, unless on or before such effective date petitions from ten percent (10%) of the member-consumers have been received by the Arkansas Public Service Commission, 1000 Center Street, Little Rock, Arkansas, 72201, the mailing address of which is: P.O. Box 400, Little Rock, Arkansas, 72203-0400.

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JUNE 2021

NORTH ARKANSAS ELECTRIC COOPERATIVE


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