At Western Illinois Electrical Coop., we work hard to control costs without adversely affecting reliability or service, but eventually the rising costs we pay for wholesale power, materials and services needed to deliver reliable electricity makes it necessary to adjust our rates.
One of the responsibilities of managing an electric cooperative is to provide the best possible service at the most affordable cost. To do this, each year the WIEC Board of Directors and our staff analyze the optimal way to manage the finances of the Cooperative, looking closely at operating costs and comparing that to the income we expect to receive from electric sales. After careful consideration, WIEC’s Board of Directors has adopted a rate increase effective March 1, 2023.
WHY IS A RATE INCREASE NEEDED?
The price of everything around us has risen dramatically and the cost to feed and provide for our families has been impacted. Energy is not exempt from these increases.
WIEC is spending a significant percentage of our budget on the cost of wholesale power. Natural gas markets are high, which impacts wholesale power costs. Coal is going away quicker than new generation is being built to replace it. Renewables have not been able to meet demand in peak periods. These are a few reasons why our wholesale power cost is increasing in 2023.
The WIEC staff knows times are tough as the cost of gasoline, groceries and other essential needs are increasing. WIEC is doing everything possible to keep internal costs down, but we cannot control the rising costs of wholesale power, which makes up 68% of our total expenses.
WHAT ARE THE CHARGES ON YOUR BILL?
On a WIEC monthly bill, members are charged for the energy they use each month with a kWh charge. There is another charge that is broken out separately called a facility charge. But what is a facility charge?
The facility charge is what should cover most of the fixed cost of providing basic service to each member’s account. The term “fixed cost,” also known as indirect cost or overhead cost, refers to business expenses that are not dependent on the level of goods or services produced or sold by the business. Examples are real estate taxes, insurance, interest expense, administrative expenses and transportation expenses, just to name a few. Some other fixed costs are maintaining the electrical system, which contains 1,200 miles of line, 23,000 poles and other line equipment like transformers. It includes equipment to do the work such as bucket trucks and trenchers. It is the lineworker on call 24/7, standing by just in case you flip the switch and nothing happens. It is the voice on the phone that says hello when you call. Fixed cost is incurred whether a member uses 5,000 kWh or 0 kWh.
You may have also noticed the Power Cost Adjustment (PCA) line item on your monthly bill. The PCA is a billing adjustment utilized to cover fluctuations in the base cost of wholesale power. The base cost will fluctuate from month to month for varied reasons. The Cooperative’s base rates can withstand small fluctuations in this cost of wholesale power. However, if the wholesale power cost fluctuates so that it is greater than the projected power cost, the Cooperative needs to be able to adjust its revenue to meet its financial obligations. The PCA allows this to happen. It should be noted that this PCA line item can be either a charge to the member or a credit to the member depending on which way the cost of wholesale power for the month fluctuates. There may also be months where the PCA is zero.
HOW MUCH IS THE INCREASE?
These charts reflect the rate changes that will go into effect for usage starting March 1, 2023. You will see them for the first time on the bills you receive in early April that will be due on April 25, 2023. You can look at your current bill to see what rate (or rates) you are on, then check below to see how they will change on March 1.
| Rates 1, 2, 13 | Rate Effective 3/1/2023 | 2022 RATE |
|---|---|---|
| Facility Charge | $53.00 | $43.00 |
| First 2000 kWh | .1275/kWh | .125/kWh |
| Next 1000 kWh | No Change | .1025/kWh |
| Over 3000 kWh | .1025/kWh | .09/kWh |
| Rates 3 & 33 | Rate Effective 3/1/23 | 2022 RATE |
| Facility Charge | $66.00 | $56.00 |
| First 2000 kWh | No Change | .1575/kWh |
| Next 1000 kWh | No Change | .1025/kWh |
| Over 3000 kWh | .1025/kWh | .09/kWh |
| Rate 4 | Rate Effective 3/1/23 | 2022 RATE |
| Facility Charge | $115.00 | $105.00 |
| All kWhs | .1025/kWh | .09/kWh |
| Demand | $12/KW | $9/KW |
| Rates 40 & 41 Electric Heat | Rate Effective 3/1/23 | 2022 RATE |
| Facility Charge | No Change | $6.00 |
| *October – April Only | ||
| All kWhs | .1025 | .0925 |
| Rates 60 & 61 Geothermal | Rate Effective 3/1/23 | 2022 RATE |
| Facility Charge | No Change | $6.00 |
| All kWhs | .1025 | .09 |
WE’RE HERE TO HELP
We recognize that a change in our rates means a change in your bill and your household budget. We want to remind you that you have access to resources that can help you manage your monthly bill. Our Budget Billing Program gives you more predictable bills by averaging the amount you pay each month based on your previous 12 months of consumption. We are here to help you determine energy solutions that work for you.
HAVE QUESTIONS?
WIEC works hard to keep its electric rates competitive and fair. We are committed to providing you with reliable, affordable and environmentally responsible electric service. If you have questions or concerns regarding the rate increase, we encourage you to call us at 217-357-3125 or 800-576-3125. We would also be happy to have you stop by the office at 524 N. Madison St. in Carthage, Ill.