RATE STRUCTURE & DESIGN

By Pat McGonagle, Vice President & Chief Financial Officer

Electricity and natural gas are essential utilities that power homes and businesses in our local communities. Understanding the rate design and the different components of your energy bill helps you manage costs effectively. In this article, I will delve into the key components of our electric and natural gas rates.

All utilities face increasing costs, and we are no exception. Rapidly growing service territories, inflation, supply chain constraints and general system upgrades put upward pressure on your cooperative’s rate structure. The infrastructure that runs throughout the communities we serve is the heart of a complex delivery system bringing utilities to your home or business. It is critical we maintain, repair and eventually replace this vast delivery network. We do this by making regular improvements to modernize and ensure our electric and natural gas distribution systems are increasingly more resilient. This important work also promotes economic growth for the communities we serve.

The Energy Cooperative's rates are designed to ensure fixed costs are recovered through a fixed monthly charge, and variable costs are recovered through variable monthly charges. The facilities fee recovers part of the cooperative’s investments in poles, wire, pipelines, meters and other equipment needed to bring energy to your home or business. Our goal is to share fixed costs equally amongst all our members. The facilities fee must be reviewed and adjusted periodically to ensure large users are not paying a disproportionate share of the fixed charges.

Here is a breakdown of all the costs included in your monthly bill. You can also see the cost breakdown on the back of your monthly bill and at myenergycoop.com/rates.

ELECTRIC RATES

• Facilities Fee: Fixed charge for meters, lines or equipment that connect the member to the cooperative’s local delivery system.

• Generation Charge: Variable charge based on cost to produce electricity at power plants.

• Transmission Charge: Variable charge based on the cost to move high voltage electricity to the cooperative’s distribution network.

• Distribution Charge: Variable charge based on cost for the movement of electricity over the cooperative’s wire, transformers, substations and other equipment to consumer’s homes and businesses.

• kWh Tax: A consumption tax charged by the state of Ohio, based upon electric usage.

NATURAL GAS RATES

• Facilities Fee: Fixed charge for meters, pipes or equipment that connect the member to the cooperative’s local delivery system.

• Gas Cost: Variable charge based on the cost to purchase natural gas and transport the product to the cooperative.

• Distribution Charge: Variable charge based on cost for the movement of natural gas over the cooperative’s pipeline system to consumer’s homes and businesses.

• Infrastructure Replacement Rider: Fixed charge provides funding to upgrade the pipeline infrastructure throughout the service territory to meet and comply with safety standards.

• Gross Receipts Tax: A consumption tax charged by the state of Ohio, based upon total charges billed.

Understanding the components of utility rates can go a long way in managing energy costs effectively. You have control over the amount of energy consumed each month. I encourage you to use the SmartHub app to view your daily (even hourly) energy use. Reviewing your detailed energy use helps identify the times when you use the most energy. Contact us at 740-344-2102 to discuss how you can reduce your overall energy consumption. You can also visit myenergycoop.com/save for easy ways to use less energy and save money on your monthly bill.

The Energy Cooperative Board of Directors and employees strive to control our expenses to keep rate adjustments to a minimum while still providing safe and reliable service to our members.